2024 Full Year Results

22 May 2025

Anglo Asian Mining PLC

2024 Full Year Results

Anglo Asian Mining PLC ("Anglo Asian", the "Company" or the "Group"), the AIM listed gold, copper and silver producer focused in Azerbaijan, announces its final audited results for the year ended 31 December 2024 ("FY 2024"). 

Financial overview

Operational and production overview

Outlook

The Company achieved a good operational performance and strong progress in its development during 2024. This was despite severely curtailed production due to the temporary shutdown of operations at the Gedabek plant which has now returned to full operations.

Anglo Asian has made an encouraging start to 2025, with 8,085 gold equivalent ounces ("GEOs") produced in the first quarter and is now operating at its previous levels across the portfolio. The Gilar mine started production during May 2025, which will contribute significant production in the year. Access has been obtained to Demirli, which holds significant potential, and is expected to enter production during the second half of 2025.

The Group's current assets, in addition to the Xarxar and Garadag mines which are scheduled to enter production by 2028, provide the board with confidence that Anglo Asian is positioned well to execute its medium term growth strategy to become a mid-tier copper focused miner and deliver meaningful shareholder value.

The Company will provide updated full year 2025 guidance later in the year after it has started operations at Demirli.

Reza Vaziri, Chief Executive Officer of Anglo Asian, commented:

"Despite a number of challenges during 2024, Anglo Asian delivered a robust performance with production in line with guidance and net debt only increasing by $4.4 million to $14.7 million following the temporary shutdown of our Gedabek agitation leaching and flotation processing operations.

"We are pleased to have made a strong start to 2025, with our quarter one production of 8,085 gold equivalent ounces, and have made considerable progress across our developmental portfolio. As a result of this progress, the Gilar mine has entered production in May and Demirli will enter production in the second half of 2025. We continue to make progress with Garadag and Xarxar.

"I look forward to providing further updates on our progress during the year, including our updated 2025 guidance which will include Demirli."

Note that all references to "$" are to United States dollars, "CAN$" are to Canadian dollars, "£" and "pence" are to the United Kingdom pound sterling and AZN are to the Azerbaijan New Manat.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014, which was incorporated into UK law by the European Union (Withdrawal) Act 2018, until the release of this announcement.

For further information please contact:

Competent Person Statement

The information in the announcement that relates to exploration results, minerals resources and ore reserves is based on information compiled by Dr Stephen Westhead, who is a full-time employee of the Group with the position of Vice-President, who is a Fellow of The Geological Society of London, a Chartered Geologist, Fellow of the Society of Economic Geologists, Fellow of the Institute of Materials, Minerals and Mining and a Member of the Institute of Directors.

Stephen Westhead has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Stephen Westhead consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

Stephen Westhead has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking, to qualify as a "competent person" as defined by the AIM rules. Stephen Westhead has reviewed the mineral resources included in this announcement. For the avoidance of doubt, resources and economically extractable copper figures in this notification are not based on a Standard for the reporting of reserves and resources, such as JORC, as defined in the AIM Rules for Companies.

Chairman's statement

Although 2024 was a challenging year for Anglo Asian Mining, we have now started our transition to a mid-sized mining company. We are looking forward to the future with confidence and have made a strong start to 2025.

Production from agitation leaching and flotation was suspended in the first nine months of the year, whilst authorisation from the Government of Azerbaijan to raise the wall of the Gedabek tailings dam was obtained. The quality and integrity of the design and construction of our tailings dam wall were confirmed by external international consultants, and this difficult period is well behind us. We have completed the first of a two-stage raise of the tailings dam wall, and both agitation and flotation processing were fully restarted in the last quarter of 2024.

The Company continued to make progress on its growth plans. The expansion of our mineral resources was confirmed with the publication of the maiden Xarxar JORC mineral resources estimate in February 2024, followed by the maiden Garadag JORC mineral resources estimate, which was published on 24 September 2024. The first ore was extracted from the Gilar mine in March 2025 and production of ore from the mine started in May 2025. We now have access to Demirli, and have established a significant operation at the property, with a view to restarting production in the second half of 2025. We also took steps to strengthen our Environmental Social and Governance ('ESG') credentials, including the formation of a sustainability committee.

Production

Our production in the year continued to be severely impacted by the partial suspension of processing in the first three quarters of the year, resulting in total production for the full year of only 16,760 gold equivalent ounces ("GEOs"). This comprised predominantly 377 tonnes of copper and 15,073 ounces of gold. This was a major reduction compared to 2023, which included a full six months of agitation leaching and flotation processing, before operations were curtailed in the second half of 2023. However, we delivered a much stronger fourth quarter in 2024, with production of 8,450 GEOs as operations were fully restarted.

Raise of the Gedabek tailings dam wall

On 5 August 2024, due to the hard work of the many parties involved, we received authorisation from the Government of Azerbaijan to raise the wall of our Gedabek tailings dam. The first phase of construction, a 2.5 metre raise of the dam wall, was completed in November 2024. The second phase of the wall raise, which will raise it to its maximum design height, is on schedule to be completed in the second half of 2025.

Strategic growth plan

Our medium-term growth strategy remains intact, with the Gilar mine having started full production in May 2025. Production from Gilar will be a significant milestone towards the Company becoming a mid-tier, primarily copper producer, as it is the first new mine the Company will open since the Gedabek underground mine in 2020. Gilar will enable the Company to reverse the declining production of the last few years from its existing mines which are approaching the end of their lives. The Demirli mine is now also included in our strategic growth plan.

Demirli

The Group obtained access to the Demirli copper mine and production facility in 2024 and has now established a significant operation at the site and is working towards restarting production. A copper resource sufficient to justify restarting production has been identified. Various technical and logistical challenges need to be overcome in order to restart operations, including ensuring the mine and plant are fully operational and there is sufficient secure storage for its tailings. Demirli is a brownfield site which had been deliberately damaged and accordingly, as you would expect, unforeseen difficulties are being encountered. However, the Group is confident that production can be restarted in the second half of 2025.

Commitment to sustainability

We remain committed to operating responsibly and upholding the highest industry standards of sustainability. During the year, we established a sustainability committee which oversees the development of our strategy and activities related to sustainable development and social responsibility. I would like to thank non-executive director Professor John Monhemius for chairing the committee, which will be instrumental in delivering real value through our activities inside and outside the Company.

We continue to prioritise environmental stewardship, community engagement and robust Environmental, Social and Governance ("ESG") practices. For the second year, we are disclosing our climate-related risks and opportunities in line with the Task Force on Climate-related Financial Disclosures ('TCFD') reporting framework. This reflects our commitment to sustainable operations and is in line with best practice reporting standards for UK-listed companies.

Revision of the Production Sharing Agreement

During the year, our production sharing agreement ("PSA") was revised, with AzerGold Closed Joint Stock Company ("AzerGold CJSC") replacing the Ministry of Ecology and Natural Resources as the local party to the PSA. Our collaboration with AzerGold CJSC, with their extensive local experience and contacts and expertise, is already benefiting the Company.

Libero Copper & Gold Corporation ("Libero")

Our shareholding in Libero remained unchanged throughout the year. However, our interest in Libero was significantly diluted in early 2024 following a major fund raising in which we did not participate. Libero ceased to be an associate company after the fund raising and is now classified as an equity investment. We still believe Libero has the ability to create shareholder value.

Dividend and going concern

The Company continued to make losses in the year due to the partial suspension of operations and therefore does not intend to pay a final dividend. The directors fully intend to resume dividend payments once conditions allow. Given that the Group is now back in full production and its operations are cash generative, the financial statements do not contain any material uncertainties as to going concern.

Annual General Meeting ("AGM")

We encourage shareholders to attend our AGM for 2025, details of which are set out below, and are also in our annual report for 2024 and available on our website. The directors welcome all shareholders to attend and look forward to meeting as many of you as possible. At the AGM for 2024, we gave shareholders a detailed presentation about the Company. We believe this presentation was well received and a further such presentation will be made at the AGM for 2025.

Rectification of technical issues regarding distributable reserves

Certain administrative technical issues have come to light with the Company's distributable reserves following receipt of a letter from the Financial Reporting Council, none of which have any impact on the Company's current trading or dividend policy. These issues can only be resolved after the shareholders approve the Group's annual financial statements for 2024. Full details will be contained in a circular and notice of general meeting which will be sent to shareholders as soon as practicable after the conclusion of the AGM for 2025.

Summary and outlook

With the significant challenges of the last two years behind us, the board is confident Anglo Asian Mining will now enter a period of sustained growth and value creation. Our strong pipeline of assets, expanding copper production and disciplined financial management provide a solid foundation for delivering long-term shareholder value.

2025 will be a much better year for the Company. We have made a strong start to the year. The Gilar mine has started production and our production guidance for 2025 underscores this with copper output expected to increase considerably to between 6,500 and 6,800 tonnes together with 28,000 to 33,000 ounces of gold. We are working to restart production at Demirli later this year, and production from Demirli in 2025 will be in addition to our already published guidance.

Appreciation

I would like to extend my gratitude to all Anglo Asian Mining employees, partners and the Government of Azerbaijan for their continued support. I would also like to thank our shareholders for their unwavering commitment to Anglo Asian Mining during what has been a challenging time. We are now delivering on our strategic goals, and I look forward to a much better 2025.

Khosrow Zamani

Non-executive chairman

21 May 2025

President and chief executive's review

I am pleased to report our results for 2024, a year in which we have overcome many challenges and laid the foundation for future growth. Our operation produced a respectable performance given the circumstances, reflecting the resilience of the Company in the face of the challenges. While the partially suspended operations severely reduced our production in 2024, we were delighted to achieve a full restart of operations during November and deliver a strong fourth quarter performance.

Operational review

Total production for the year was 16,760 gold equivalent ounces ("GEOs"), compared to 31,821 GEOs in 2023. Copper production totalled 377 tonnes, compared with 2,138 tonnes in 2023, while gold production totalled 15,073 ounces, compared with 21,758 ounces in 2023.

We took the opportunity of the shutdown of agitation leaching and flotation processing to undertake extensive renovation and refurbishment of our plants. This proved beneficial to our operations and no significant issues have arisen with our flotation and agitation leaching processing plants since their restart in the fourth quarter of 2024.

Development of the Gilar mine continued throughout 2024. The tunnelling encountered worse ground conditions than anticipated, which required the use of shotcrete and reinforced roof supports which unfortunately delayed its development. However, we were very pleased that the first ore was extracted in March 2025 and the mine started full production in May 2025. The surface infrastructure is now complete and includes a heavy equipment maintenance workshop. Our new Caterpillar mining fleet is now fully operational. 

We made important progress with our development portfolio. In February 2024, the maiden JORC mineral resources estimate of Xarxar was published. This confirmed that Xarxar contains 24.9 million tonnes of mineralisation with average grades of 0.48 per cent. copper which equates to over 100,000 tonnes of copper in the ground. On 24 September 2024, the maiden JORC mineral resources estimate of Garadag was published which showed the deposit contains 285 million tonnes of mineralisation with an average grade of 0.32 per cent. copper. This is approximately 900,000 tonnes of copper. The Group now has, in total, a JORC minerals resource of over one million tonnes of copper. Xarxar and Garadag are significant pillars in our ability to transition to a copper focused producer.

We obtained restricted access to Demirli in 2024 and a significant operation has been established at the site. We are progressing well towards restarting production at Demirli.

We decided not to take part in Libero Copper & Gold Corporation's ("Libero") fundraise in January 2024. This decision reflected the Company's priorities and cash requirements. Our shareholding as a result reduced to 5.7 per cent., with Michael Sununu resigning from Libero's board in February 2024.

Tailings storage and the restart of production

We received, on 5 August 2024, authorisation from the Government of Azerbaijan to raise our tailings dam wall at Gedabek. The first raise of 2.5 metres was completed in November with the full raise on schedule to be completed in the second half of 2025. We have also returned to full production with the agitation leaching processing plant and flotation processing fully restarting in the fourth quarter. The plants are processing ore from our existing mines and stockpiles until ore is available from Gilar.

Financial review

Revenues in the year were $39.6 million compared to $45.9 million in 2023. Revenues include gold bullion sales of 15,251 ounces at an average price of $2,432 per ounce and total copper concentrate sales of 1,519 dry metric tonnes valued at $2.5 million.

The Company did not hedge any of its gold bullion production in the year. 1,600 ounces of gold in respect of hedges entered into in 2023 were closed in the year, resulting in a small loss compared to the spot price of gold at the date of closure of the hedges.

The Company incurred a loss before tax of $21.3 million compared with a loss in 2023 of $32.0 million. This loss was incurred due to the partial suspension of processing throughout most of the year and higher finance costs.

The Group will not report an All-In Sustaining Cost ("AISC") of gold produced for 2024. The Group's costs in 2024 include substantial non-production costs, such as maintaining the idle plant and Gedabek site, and the cost of the Gedabek workforce, many of whom were placed on administrative leave. The AISC metric is therefore not meaningful for 2024.

Following a refinancing by Libero in early 2024, in which Anglo Asian Mining did not participate, our holding in Libero fell to 5.7 per cent. in February 2024 and it ceased to be an associate company. Since February 2024, Libero has been accounted for as an equity investment. A total net profit of $0.2 million was recognised in the year in respect of Libero as an associate company and trade investment.

The Company had net debt (excluding lease liabilities) of $14.7 million at 31 December 2024 and saleable inventory of 1,055 ounces of gold with a market value of approximately $2.8 million.

In May 2024, the Company signed a vendor financing facility with Caterpillar Financial Services Corporation to refinance $3.7 million of the purchase price of the Caterpillar mining fleet purchased in 2023. The facility was fully drawn down in August 2024. The Group also consolidated loans totalling $5.0 million with the International Bank of Azerbaijan into one loan which was renewed for one year until May 2025.

In June 2024, the Company entered into a prepayment agreement with Trafigura Pte Ltd ("Trafigura") for copper concentrate sales totalling $5.0 million. A $3.0 million prepayment was received in June but was repaid before the end of the year. A further $5.0 million prepayment was received in February 2025. We are currently in negotiations to provide a copper concentrate sale prepayment facility for the Demirli plant.

Revenues from production at Gedabek throughout the year continued to be subject to an effective royalty of 12.75 per cent. through our production sharing agreement with the Government of Azerbaijan. We anticipate that this same royalty rate will continue to apply to at least the end of 2025 for our operations at Gedabek.

Environmental, Social and Governance ("ESG")

Sustainability is deeply embedded across our operations. Our sustainability activities are overseen by Anglo Asian Mining's sustainability committee, chaired by Professor John Monhemius, which was established during the year. The Committee ensures our operations are sustainable and produce value for all stakeholders, including local communities. To this end, we appointed a new community engagement manager during the year, who is strengthening the communication and engagement between Anglo Asian Mining and local communities.

Anglo Asian Mining is one of the largest employers in Azerbaijan, with nearly 1,000 employees, and we recognise our wider responsibilities to them and the local community by participating in community development through various outreach programs, including medical assistance, food aid, and environmental initiatives such as tree planting. We were pleased in the year to publish updated policies for health and safety, business conduct, ethics and anti-bribery, and environment and climate, which summarise and communicate our strict sustainability and responsible business practices.

We are proud to be committed to implementing the Global Industry Standards on Tailings Management ('GISTM') across our operations and we will continue to work towards full alignment with these standards, aiming to confirm our full compliance with these standards by the end of 2026.

Looking ahead

With Gilar having started full ore production in May 2025, and significant progress being made in 2024 and 2025 to date across our developmental asset portfolio, we remain confident that we are well placed to deliver growth in the medium term, ultimately transitioning into a copper focused, mid-tier miner. We have made a strong start to 2025.

We were delighted to provide guidance earlier this year, expecting 2025 to see our highest ever copper production at 6,500 to 6,800 tonnes, and also anticipate gold production of 28,000 to 33,000 ounces. This guidance contains no production from Demirli and guidance will be updated once the operation is restarted in 2025. 

I would like to thank our teams for their commitment and hard work, which have been instrumental in advancing our performance across all operations. I am confident these efforts will enable us to achieve sustainable growth over the coming year and beyond in line with our strategic growth plan.

We will continue to deliver meaningful value for our stakeholders and attractive shareholder returns as we execute our growth strategy.

Reza Vaziri

President and chief executive

21 May 2025

Annual General Meeting for 2025

The Annual General Meeting of the Company for 2025 will be held on 25 June 2025 at 11:00am at The Washington Mayfair Hotel, 5 Curzon Street, London W1J 5HE, United Kingdom. All shareholders are warmly invited to attend.

Corporate governance and Section 172 (1) Statement

A statement of the Company's compliance with the ten principles of corporate governance in the Quoted Companies Alliance Corporate Governance Code ('QCA Code') will be included in the Company's annual report and accounts for 2024.

The Company's Section 172 (1) Statement is included within the strategic report below.

Sustainability and TCFD climate related financial disclosures at Anglo Asian Mining

A report on sustainability, including a detailed report on health and safety, will be included in the Company's annual report and accounts for 2024. The TCFD climate-related financial disclosures will also be included in the Company's annual report and accounts for 2024.

Strategic report

Principal activities

Anglo Asian Mining PLC (the "Company"), together with its subsidiaries (the "Group"), owns and operates gold, silver and copper producing properties in the Republic of Azerbaijan ("Azerbaijan"). It also explores for, and develops, gold and copper deposits in Azerbaijan.

The Group has a substantial portfolio of greenfield assets that lay the foundation for future growth of the business. Gilar, Zafar, Xarxar and Garadag all host significant ore deposits which contain total JORC mineral resources (measured, indicated and inferred) of over one million tonnes of copper and 328,000 ounces of gold.

Production Sharing Agreement with the Government of Azerbaijan

The Group's mining concessions ("Contract Areas") in Azerbaijan are held under a Production Sharing Agreement ("PSA") with the Government of Azerbaijan dated 20 August 1997. Amendments to the PSA which granted the Group additional Contract Areas, were passed into law in Azerbaijan on 5 July 2022.

A further amendment was made to the PSA which replaced the local party to the PSA, the Ministry of Ecology and Natural Resources, with AzerGold Closed Joint Stock Company ("AzerGold CJSC"). Minor amendments were also made in respect of the use of facilities for the Kyzlbulag, Demirli and Vejnaly Contract Areas. These amendments were passed into law in Azerbaijan on 21 June 2024.

Contract Areas in Azerbaijan

The Group has eight Contract Areas covering a total of 2,544 square kilometres in western Azerbaijan:

The Gedabek, Xarxar, Garadag and Gosha Contract Areas form a contiguous territory totalling 1,408 square kilometres. The Group currently has limited access to the Demirli Contract Area and no access to the Kyzlbulag Contract Area. The PSA will only commence in respect of these two Contract Areas upon notification by the Government of Azerbaijan to the Group that it is safe to grant full access to the district in which the Contract Areas are located.

Overview of 2024

The Group's strategy is to transition into a mid-tier, copper focused producer, which will be achieved through developing its considerable assets. Production from the Group's agitation leaching and flotation plants had been suspended in late 2023 whilst permission was being obtained for a final raise of the tailings dam wall. The suspension of these processing plants continued into 2024. The permission to raise the tailings dam wall was obtained on 5 August 2024. Agitation leaching restarted production in September 2024 and flotation processing restarted production in November 2024. Limited production of gold doré and copper continued throughout 2024 by heap leach and SART processing. Only limited mining took place but development of the Gilar mine continued throughout the year.

Despite the limited production during the year and the associated strong focus on cost control, the Group continued to make progress on its development and in strengthening its Environment Social and Governance ('ESG') credentials. A sustainability committee was established during 2024.

Gilar mine development

Gilar mine development continued throughout the year and was substantially completed by the end of 2024. The surface infrastructure supporting the tunnelling was also completed in 2024.

Commitment to Global Industry Standard on Tailings Management

In January 2024, the Group committed to implement the Global Industry Standard on Tailings Management ("GISTM") at its operations at Gedabek.

Libero Copper & Gold Corporation ("Libero")

In February 2024, Michael Sununu, a non-executive director of the Company, resigned from the board of Libero. This followed the Group's holding in Libero decreasing to approximately 5.7 per cent. Libero also ceased to be an associate company of the Group in February 2024.

Xarxar maiden JORC mineral resources estimate

On 20 February 2024, the maiden JORC mineral resources estimate for the Group's Xarxar copper deposit was published, confirming 24.9 million tonnes of mineralisation with average grades of 0.48 per cent. copper.

Establishment of a sustainability committee

In March 2024, a sustainability committee for the Group was established chaired by Professor John Monhemius.

Vendor financing facility agreement with Caterpillar Financial Services Corporation

In May 2024, the Group's subsidiary, Azerbaijan International Mining Company Limited, signed a vendor financing facility agreement with Caterpillar Financial Services Corporation for $3.7 million. On 26 August 2024, the proceeds of the loan of $3.7 million were received.

Climate Change and Task Force on Climate-related Financial Disclosures ("TCFD")

In June 2024, the Group included in its annual report for 2023, its first detailed report on climate-related risks and opportunities in accordance with the TCFD recommendations. This report also contained detailed information regarding the Group's energy use and greenhouse gas emissions.

Prepayment agreement for the sale of concentrate

In June 2024, the Group's subsidiary, Azerbaijan International Mining Company Limited, entered into a prepayment agreement totalling $5.0 million in respect of its sales of copper concentrate with Trafigura Pte Ltd. $3.0 million of the prepayment was drawn down in June 2024. The $3.0 million prepayment was repaid shortly before 31 December 2024.

Production Sharing Agreement ("PSA")

In June 2024, the Group's production sharing agreement ("PSA") was revised, with AzerGold CJSC replacing the Ministry of Ecology and Natural Resources as the local party to the PSA. Various other minor amendments were also made to the PSA.

Access to Demirli

In June 2024, limited access to the Demirli mine and plant in Karabakh was obtained. The Group started extensive studies of the property with a view to restarting production.

Authorisation to raise the wall of the tailings dam

On 5 August 2024, the Group received authorisation from the Government of Azerbaijan to raise the wall of the Gedabek tailings dam. Confirmation was also received that the proposed construction work complied with all health and safety requirements. Work on the wall raise started immediately. The first stage of the two-stage wall raise was completed in November 2024.

Garadag maiden JORC mineral resources estimate

On 24 September 2024, the maiden JORC mineral resources estimate for the Garadag copper deposit was published confirming a total resource (Indicated and Inferred categories) of approximately 900,000 tonnes of copper metal hosted in 285 million tonnes of mineralisation with average grades of 0.32 per cent. copper.

Restart of agitation leaching and flotation production

In September 2024, production was restarted from the Group's agitation leaching plant. In November 2024, production was restarted from its flotation plant.

Production guidance for full year 2025 ("FY 2025")

The Group published its production guidance for FY 2025 on 26 February 2025 as follows:

The Group will no longer report headline production guidance in gold equivalent ounces ("GEOs") as copper is becoming an increasingly significant part of the Group's production. Significant movements in the ratio of the gold to the copper price in the year can also make reported actual production misleading compared to guidance.

To aid comparison, the Group's production guidance for FY 2025 calculated as GEOs is as follows:

*The Company does not forecast silver production as it is not material.

** The guidance and gold equivalent ounces have been computed using a gold price of $2,800 per ounce and a copper price of $9,000 per tonne.

The above production guidance excludes any production in 2025 from Demirli.

†Turnover

Turnover is sale proceeds of the Group's share of production. The Group's share of production is assumed to be 87.25 per cent. for 2025.

††EBITDA

EBITDA is defined as earnings before Interest, tax, depreciation and amortisation.

Mineral resources and ore reserves

Key to the future development of the Group are the mineral resources and ore reserves within its Contract Areas. Mineral resource and ore reserve estimates are produced both in accordance with the JORC (2012) code ("JORC") and as non-JORC compliant internal estimates.

Internal Group estimates have been prepared, in accordance with JORC procedures, of the remaining mineralisation of the Gedabek open pit, the Gedabek underground mine and the Gadir underground mine as at 1 January 2025. These are set out in Tables 1 to 3 respectively.

A final JORC mineral resources estimate of the Zafar deposit at 30 November 2021 is set out in Table 4. A maiden JORC mineral resources estimate of the Gilar deposit at 30 November 2023 was published on 11 December 2023 and is set out in Table 5. A maiden JORC mineral resources estimate of copper in the Xarxar deposit at January 2024 was published on 20 February 2024 and is set out in Table 6.

The maiden JORC mineral resources estimate of copper in the Garadag deposit at July 2024 was published on 24 September 2024 and is set out in Table 7. Table 8 sets out the Soviet mineral resources estimate for the Vejnaly deposit. Table 9 sets out an internal Group estimate of the remaining mineral resources of the Demirli deposit classified according to the JORC standard at 1 January 2025.

Table 1 - Internal Group estimate of the remaining mineralisation of the Gedabek open pit in accordance with JORC at 1 January 2025

Some of the totals in the above table may not sum due to rounding

All tonnages reported are dry metric tonnes.

Table 2 - Internal Group estimate of the remaining mineralisation of the Gedabek underground mine in accordance with JORC at 1 January 2025

Some of the totals in the above table may not sum due to rounding

All tonnages reported are dry metric tonnes.

Table 3 - Internal Group estimate of the remaining mineralisation of the Gadir underground mine in accordance with JORC at 1 January 2025

Some of the totals in the above table may not sum due to rounding

All tonnages reported are dry metric tonnes.

Table 4 - Final JORC mineral resources estimate of the Zafar deposit at 30 November 2021

Copper > 0.3 per cent. copper equivalent

Some of the totals in the above table may not sum due to rounding

All tonnages reported are dry metric tonnes.

Table 5 - Maiden JORC mineral resources estimate of the Gilar deposit at 30 November 2023

Reporting cut-off >= 0.5 grammes per tonne of gold equivalent*

Some of the totals in the above table may not sum due to rounding

All tonnages reported are dry metric tonnes.

*Gold equivalent calculation = Gold g/t plus (copper per cent.*1.49) plus (zinc*0.46). The metal price assumptions used were Gold - $1,675 per ounce; Copper - $8,000 per tonne; Zinc - $2,500 per tonne.

Table 6 - Maiden JORC mineral resources estimate of copper in the Xarxar deposit at January 2024

Reporting cut-off >= 0.2 per cent. copper

Some of the totals in the above table may not sum due to rounding

All tonnages reported are dry metric tonnes.

*Measured resources were nil due to insufficient third-party quality assurance and quality control ("QAQC") drill core assays being carried out. Further QAQC drill core assays will be carried out.

Table 7 - Maiden JORC mineral resources estimate of copper in the Garadag deposit at July 2024 by domain

Some of the totals in the above table may not sum due to rounding

All tonnages reported are dry metric tonnes.

Table 8 - Soviet mineral resources estimate of the Vejnaly deposit

Some of the totals in the above table may not sum due to rounding

Table 9 - Internal Group estimate of the remaining mineral resources of the Demirli deposit classified according to the JORC standard at 1 January 2025.

Some of the totals in the above table may not sum due to rounding

All tonnages reported are dry metric tonnes.

The above mineral resources estimate for Demirli is only in respect of the mineral resources below the current open pit and does not include further resources in the surrounding area.

Gedabek

Introduction

The Gedabek mining operation is located in a 300 square kilometre Contract Area in the Lesser Caucasus mountains in western Azerbaijan on the Tethyan Tectonic Belt, one of the world's most significant copper and gold-bearing geological structures. Gedabek is the location of the Group's Gedabek open pit mine, the Gadir and Gedabek underground mines and the Group's processing facilities. Two new underground mines, Zafar and Gilar, are in the developmental stage at Gedabek. The development of Gilar is almost complete with its first ore extracted in March 2025 and production started in May 2025. One portal of the Zafar mine has been constructed but no further development is currently being carried out.

Gold production at Gedabek commenced in September 2009. Ore was initially mined from an open pit, with underground mining commencing in 2015, when the Gadir mine was opened. In 2020, underground mining commenced beneath the main open pit (the "Gedabek underground mine"). The Gedabek and Gadir underground mines now form one continuous underground system of tunnels.

Initial gold production was by heap leaching, with copper production beginning in 2010 from the Sulphidisation, Acidification, Recycling and Thickening ("SART") plant. The Group's agitation leaching plant commenced production in 2013 and its flotation plant in 2015. From the start of production to 31 December 2024, approximately 825 thousand ounces of gold and 21 thousand tonnes of copper have been produced at Gedabek.

Environmental study and Micon report

Micon International Co Limited ("Micon") undertook a health, safety and environmental due diligence review of tailings management at Gedabek in July 2023. No significant environmental contamination was found. The final Micon report contained various recommendations to improve some operational, social and safety aspects of the Gedabek operations. In November 2023, the Group agreed an action plan with the Government of Azerbaijan (the "Action Plan") to address these recommendations.

The recommendations of the Action Plan included improving the Gedabek emergency response capability, strengthening its environmental monitoring and documentation and how the Group engages and communicates with local communities. Implementation of the recommendations continued satisfactorily during the year with all short-term recommendations completed in 2024. The Government of Azerbaijan receives frequent updates on the status of the recommendations.

Gedabek open pit and Gedabek and Gadir underground mines

The principal mining operation at Gedabek is conventional open-cast mining using trucks and shovels from the Gedabek open pit (which comprises several contiguous smaller open pits). Ore is also mined from the Gadir and Gedabek underground mines. These two underground mines are connected, and form one continuous underground network of tunnels, accessible from both the Gadir and Gedabek portals. However, a significant fault structure separates the two mines.

Zafar mine development

The Zafar deposit was discovered in 2021 and is located 1.5 kilometres northwest of the existing Gedabek processing plant. Its final mineral resources estimate was published in March 2022 and is set out in Table 4 above.

A mining scoping study for the Zafar mine was completed in February 2023 and development commenced. Two tunnels are planned, one for haulage and a parallel ventilation tunnel. One of the two portals required for the tunnels was constructed close to the existing Gedabek processing facilities and about one kilometre from the mineralisation. Five metres of haulage tunnel and 6.6 metres of ventilation tunnel had also been completed, prior to suspension of development.

Development of the Zafar mine was stopped in mid-2023 and resources diverted to development of the Gilar mine, following exceptional drill results from Gilar.

Gilar mine development

Gilar is a mineral occurrence located approximately seven kilometres from the Company's processing facilities and close to the northern boundary of the Gedabek Contract Area. The Group commenced developing the Gilar underground mine in late 2022 following exceptional drilling results in the south of the area.

A maiden JORC mineral resources estimate was published on 11 December 2023 and is set out in Table 5 above.

The Gilar mine comprises two underground tunnels, a main production tunnel and a second tunnel for ventilation. A spiral accesses the ore body. The planned lengths of the production and ventilation tunnels are 1,461 metres and 774 metres respectively. The walls of the tunnels are supported by steel arches and shotcrete where necessary due to soft rock. Water encountered underground is being pumped from the mine into a settling pond constructed near the entrance to the mine. The development of Gilar was substantially completed in the first quarter of 2025 and the first ore extracted in March 2025. Gilar started production in May 2025.

Surface infrastructure comprises of a heavy equipment workshop, mine office facilities and technical support and services offices and a canteen. Security and safety fencing, a mine entrance area and power generator set foundations have also been constructed.

In December 2023, the Company took delivery of a new underground mining fleet supplied by Caterpillar for the mine. The fleet comprised three R1700 and two 980UMA underground loaders. This is the first time this type of underground equipment has been deployed in Azerbaijan.

Ore mined in 2024

Table 10 sets out all the ore mined by the Group for the year ended 31 December 2024.

Table 10 - Ore mined at Gedabek for the year ended 31 December 2024

Mining at Gedabek was considerably reduced compared to previous years as agitation leaching and flotation processing were suspended for a substantial part of 2024.

Processing operations

Ore is processed at Gedabek to produce either gold doré (an alloy of gold and silver with small amounts of impurities, mainly copper) or a copper and precious metal concentrate.

Gold doré is produced by cyanide leaching. Initial processing is to leach (i.e. dissolve) the precious metal (and some copper) in a cyanide solution. This is done by various methods:

1. Heap leaching of crushed ore. Crushed ore is heaped into permeable "pads" onto which is sprayed a solution of cyanide. The solution dissolves the metals as it percolates through the ore by gravity and it is then collected on the impervious base under the pad.

2. Heap leaching of run of mine ("ROM") ore. The process is similar to heap leaching for crushed ore, except the ore is not crushed, instead it is heaped into pads as received from the mine (ROM) without further treatment or crushing. This process is used for very low grade ores.

3. Agitation leaching. Ore is crushed and then milled in a grinding circuit. The finely ground ore is placed in stirred (agitation) tanks containing cyanide solution and the contained metal is dissolved in the solution. Any coarse, free gold is separated using a centrifugal-type Knelson concentrator.

Slurries produced by the above processes with dissolved metal in solution are then transferred to a resin-in-pulp ("RIP") plant. In this plant, a synthetic resin is used to selectively absorb the gold and silver from the slurry. The metal-loaded resin is then "stripped" of its gold and silver by desorption into another solution, from which the metals are recovered by electrolysis, followed by smelting to produce the doré metal, which comprises an alloy of gold and silver.

Copper and precious metal concentrates are produced by two processes, SART processing and flotation.

1. Sulphidisation, Acidification, Recycling and Thickening ("SART"). The cyanide solution after gold absorption by resin-in-pulp processing is transferred to the SART plant. The pH of the solution is then changed by the addition of reagents which precipitates the copper and any remaining silver from the solution. The process also recovers cyanide from the solution, which is recycled back to leaching.

2. Flotation. Finely ground ore is mixed with water to produce a slurry called "pulp" and reagents are then added. This pulp is processed in flotation cells (tanks), where the pulp is stirred and air introduced as small bubbles. The sulphide mineral particles attach to the air bubbles and float to the surface where they form a froth which is collected. This froth is dewatered to form a mineral concentrate containing copper, gold and silver.

The Group's processing plants underwent extensive maintenance in 2023 and 2024 during the period when agitation leaching and flotation processing was suspended. Extensive refurbishment of the agitation and flotation plants was carried out, including installing a new hopper and redesigned pipework for the agitation leach plant to improve ore feed. The ball mills were relined and refurbished. Much of the work has improved safe working such as repairing minor leaks, installing new floors and improving ladders and gantries. Roof repairs have also been carried out where necessary. A substantial proportion of the exterior of the plant has been cleaned by shot blasting and repainted. Exterior pipework has also been cleaned or replaced as necessary.

Table 11 summarises the ore processed by leaching for the year ended 31 December 2024.

Table 11 - Ore processed by leaching at Gedabek for the year ended 31 December 2024

Table 12 summarises ore processed by flotation for the year ended 31 December 2024.

Table 12 - Ore processed by flotation at Gedabek for the year ended 31 December 2024

Previously heap leached ore

Gold production at Gedabek from 2009 to 2013 was by heap leaching crushed ore until the start-up of the agitation leaching plant in 2013. The heaps remain in-situ and given the high grade of ore processed prior to the commencement of agitation leaching, and the lower recovery rates, much of the early heap leached ore contains significant amounts of gold. This is now being reprocessed by agitation leaching. Table 13 sets out the previously heap leached ore processed for the year ended 31 December 2024.

Table 13 - Previously heap leached ore processed for the year ended 31 December 2024

The in-situ material is calculated at a standard cutoff grade of > 0.8 grammes per tonne of gold.

Production and sales

For the year ended 31 December 2024, gold production totalled 15,073 ounces, which was a decrease of 6,685 ounces in comparison to the production of 21,758 ounces for the year ended 31 December 2023. Copper production for the year ended 31 December 2024 was 377 tonnes compared to 2,138 tonnes for the year ended 31 December 2023, a decrease of 1,761 tonnes. The lower production of gold and copper in 2024 compared to 2023 arose due to the suspension of agitation and flotation processing for a substantial part of 2024. 

Table 14 summarises the gold and silver bullion produced from doré bars and sales of gold bullion for the year ended 31 December 2024.

Table 14 - Gold and silver bullion produced from doré bars and sales of gold bullion for the year ended 31 December 2024

* including the Government of Azerbaijan's share

** excluding the Government of Azerbaijan's share

Table 15 summarises the total copper, gold and silver produced as concentrate by both SART and flotation processing for the year ended 31 December 2024.

Table 15 - Total copper, gold and silver produced as concentrate by both SART and flotation processing for the year ended 31 December 2024 

Table 16 summarises the total copper concentrate (including gold and silver) production and sales from both SART and flotation processing for the year ended 31 December 2024.

Table 16 - Total copper concentrate (including gold and silver) production and sales from both SART and flotation processing for the year ended 31 December 2024

* including the Government of Azerbaijan's share

** excluding the Government of Azerbaijan's share

† These are invoiced sales of the Group's share of production before any accounting adjustments in respect of IFRS 15. The total for the year does not therefore agree to the revenue disclosed in note 6 - "Revenue" to the Group financial statements.

Infrastructure

The Gedabek Contract Area benefits from excellent infrastructure and access. The site is located adjacent to the town of Gedabek, which is connected by good metalled roads to the regional capital of Ganja. Baku, the capital of Azerbaijan, is to the south and the country's border with Georgia to the north, are each approximately a four to five hour drive over good quality roads. The site is connected to the Azeri national power grid.

Water management

The Gedabek site has its own water treatment plant which was constructed in 2017 and which uses the latest reverse osmosis technology. In the last few years, Gedabek town has experienced water shortages in the summer and this plant reduces to the absolute minimum the consumption of fresh water required by the Company.

Tailings (waste) storage

Tailings are stored in a purpose-built dam approximately seven kilometres from the Group's processing facilities, topographically at a lower level than the processing plant, thus allowing gravity assistance of tailings flow in the slurry pipeline. Immediately downstream of the tailings dam is a reed bed biological treatment system to purify any seepage from the dam before being discharged safely into the nearby Shamkir river.

In the second half of 2023, the Group started working with the Government of Azerbaijan to obtain approval for a final raise of the tailings dam wall. In June 2024, the Government of Azerbaijan issued technical confirmation and a positive environmental report stating that the tailing dam wall was suitable for a final raise. On 5 August 2024, the Government of Azerbaijan issued approval for the wall raise to go ahead. A further 6.0 metres wall raise was authorised which will raise the wall to its final design height of 90 metres. The wall raise is being carried out in two back-to-back stages, and the first raise of 2.5 metres was completed in November 2024. The final wall raise of 3.5 metres is currently being carried out with completion expected in the second half of 2025. The final raise of the wall will give the dam enough capacity for the next two to three years of production.

Xarxar

The 464 square kilometre Xarxar Contract Area is located immediately north of the Gedabek Contract Area which it borders. The Xarxar Contract Area was acquired in 2022 together with historical geological and other data owned by AzerGold CJSC, its previous owner.

The Xarxar Contract Area hosts the Xarxar copper deposit. The mineralisation of the deposit is copper dominant and comprises mainly oxides and secondary sulphides, with minerals such as malachite, azurite, pyrite, chalcocite and bornite, together with some primary chalcopyrite, as common minerals in the deposit, and minor barite and magnetite minerals are also recorded. The main copper mineralisation lenses are located in the central part of the Xarxar deposit, with approximate east-west orientations.

No geological fieldwork was carried out during 2024 at Xarxar. Analysis continued of the drill core acquired from AzerGold CJSC. On 20 February 2024, a maiden JORC mineral resources estimate was published for the Xarxar deposit, which is set out in Table 6 above.

Gilar is situated close to the northern boundary of the Gedabek Contract Area. Geological exploration indicates that this deposit trends to the north. The Xarxar Contract Area extends the Gedabek Contract Area to the north and will therefore enable the Gilar deposit to be fully mined.

Garadag

The 344 square kilometre Garadag Contract Area is situated four kilometres north of Gedabek alongside the road from Gedabek to Shamkir. Garadag was first explored during the Soviet era and has been extensively explored since then, most recently by AzerGold CJSC, its previous owner. The roads built for drill access are still accessible and serviceable on Garadag.

In 2022, the Group acquired historical geological and other data and associated reports (the "Data") in respect of Garadag from AzerGold CJSC for $3.3 million. The Data includes geochemical and geophysical data, including maps and interpretative reports. Substantial core drilling and data interpretations were carried out by Azergold CJSC and the Data includes 9,645 chemical assays taken from 23,454 metres of drill core, which have been transferred to the Group. The Data also includes an initial mining scoping study based on a preliminary mineral resource estimate with various options for mine development, including open pit designs, initial mining schedules and an outline metallurgical flow sheet. An environmental and socio-economic baseline assessment has also been carried out and is included in the Data.

No drilling or other geological fieldwork was carried out at Garadag out in 2024. However, the Company continued to analyse the drill core obtained from AzerGold CJSC.

On 24 September 2024, the Company published a maiden JORC mineral resources estimate of the Garadag deposit at July 2024. This showed a total in-situ mineral resource (indicated and inferred) of 285 million tonnes of mineralisation containing 897 thousand tonnes of copper at an average grade of 0.32 per cent. This maiden JORC resource is set out in Table 7 above.

Gosha

The Gosha Contract Area is 300 square kilometres in size and is situated in western Azerbaijan, 50 kilometres northwest of Gedabek. Gosha is regarded as under-explored. Gosha is the location of a small, high grade, underground gold mine. Ore mined at Gosha is transported by road to Gedabek for processing. No mining was carried out in the Gosha mine in the year ended 31 December 2024.

Geological fieldwork has resulted in the discovery of additional mineralisation adjacent to the existing underground mine. This includes "Hasan", a sub-vertical high gold grade mineralised vein, immediately south of the existing Gosha mine. Hasan can be accessed via a short tunnel from the existing tunnelling at Gosha. A further vein close to Hasan called "Akir" is also showing promising mineralisation.

The Group is also carrying out geological fieldwork at Asrikchay, a copper and gold target situated within the Gosha Contract Area. Asrikchay is located in the northeast corner of the Contract Area, about seven kilometres from the Gosha mine, within the Asrikchay valley.

Vejnaly

Vejnaly is a 300 square kilometre Contract Area located in the Zangilan district in southwest Azerbaijan. It borders Iran to the south and Armenia to the west and hosts the Vejnaly deposit.

A thorough survey of the site has been carried out, which has found that the main ore body was extensively mined during the Armenian occupation. There are both open pit and underground workings at the location. There is also an existing crusher and flotation processing plant at the mine, which will need extensive renovation to recommence operations.

On 3 August 2023, staff were evacuated from Vejnaly on the instructions of the Government of Azerbaijan due to the potential danger from landmines. At 31 December 2024, staff had still not received formal permission from the Government of Azerbaijan to return to Vejnaly. Accordingly, no geological fieldwork was carried out at the site in 2024.

Ordubad

The 462 square kilometre Ordubad Contract Area is located in the Nakhchivan exclave, southwest Azerbaijan, and contains numerous targets. Limited geological exploration work was carried out in the year ended 31 December 2024.

Kyzlbulag

The Kyzlbulag Contract Area is 462 square kilometres and is located in Karabakh. It contains several mines and has excellent potential for exploration, as indicated by the presence of many mineral deposits and known targets in the region. There are indications that up to 35,000 ounces of gold per year were extracted from the Kyzlbulag copper-gold mine, before the mine was closed several years ago, indicating the presence of a gold mineralising system.

No work was carried out at Kyzlbulag in the year ended 2024 as the Group had no access to the Contract Area.

Demirli

The Demirli Contract Area is 74 square kilometres that extends to the northeast by about 10 kilometres from the Kyzlbulag Contract Area and contains the Demirli mining property. The Demirli mining property comprises an open pit mine, a processing plant and power infrastructure. The processing plant contains two rotary mills, a copper flotation plant and a molybdenum plant. The plant is generally in good order although various sections need replacement or refurbishment. The capacity of the plant is around 6.5 million tonnes per annum. There is also an upstream tailings dam located close to the plant.

The Group had restricted access to Demirli in the year ended 31 December 2024. The Group has started a comprehensive study to determine the work required and associated timeframe to bring the plant back into production. Various external consultants have also visited the site to carry out an environmental assessment and assessment of the suitability of the tailings dam for further use. The Group now has a small team based permanently at Demirli. The Group is also refurbishing the accommodation and laboratory facilities at the mine site.

A reverse circulation drilling programme was completed at Demirli in 2024 to determine the start-up resource of the mine. An internal Group estimate of the remaining mineral resources classified in accordance with JORC was 58.3 million tonnes of ore with an average copper grade of 0.41 per cent. copper containing 239 thousand tonnes of copper. This internal estimate is set out in Table 9 above.

Geological exploration

Summary

Gedabek

Gedabek open pit mine

52 reverse circulation drill holes were completed with a total length of 4,241 metres to further define the ore zone. The drilling was mostly located in Pits 4, 5, 6, 8, 11 and 12 of the main open pit. The results confirmed the further extension of the gold-copper mineralisation.

Gedabek underground mine

A total of 706 metres of underground development with 250 channel samples was completed in the area below Pit 4. The aim of the development is to target production of ore between mining levels.

Gilar

The area hosts two styles of mineralisation, gold in quartz veins and hydrothermal gold-copper. Three mineralisation bodies have been discovered.

One underground geotechnical core drill hole was completed with a total length of 138 metres. Channel sampling of the walls of the tunnel was carried out with 182 underground samples taken with a total length of 1,229 metres.

Zafar

The geology of the area is structurally complex, comprising mainly of Upper Bajocian-aged volcanics. The mineralisation seems to be associated with a main northwest to southeast trending structure, which is interpreted as post-dating smaller northeast to southwest structures. In the southwest area, outcrops with tourmaline have been mapped, which can be indicative of the potential for porphyry-style mineral formation.

There was no geological exploration carried out at Zafar in 2024. Comprehensive interpretation of the final results from the soil geochemical sampling programme has revealed a second anomaly similar to the original Zafar anomaly. This area has significant potential for future exploration.

Gosha

The Gosha mine was initially thought to consist of two narrow gold veins, zone 13 and zone 5. Mining has taken place from both veins. A further vein, "Hasan", has also been discovered located immediately south of zone 5, which it intersects at one point. The host rock mostly exhibits silicification and kaolinisation alteration, which changes to quartz-haematite alteration in andesite.

There was no geological exploration carried out at the Gosha mine in 2024.

Geological fieldwork activity was carried out at the Boyuk Gishlag mineralisation occurrence within the Gosha Contract Area. A total of 228 samples were collected from intensive hydrothermal altered outcrops.

Xarxar

A maiden mineral resources estimate was published for the Xarxar deposit on 20 February 2024 and is set out in Table 6 above. This shows the deposit contains approximately 25 million tonnes of copper ore.

Scanning of the existing Xarxar drill core was undertaken during 2024 using TerraCore technology. After completion of the scans, a 3-D alteration model is prepared to identify further mineralisation and help identify the best metallurgical methods to process the ore. TerraCore scanning is hyperspectral scanning which enables identification of anomalies not visible to the naked eye. The scanning is being carried out by TerraCore staff in Azerbaijan using a TerraCore scanner imported into Azerbaijan. This is the first time hyperspectral scanning has been carried out in Azerbaijan.

Uluxanli

This is a new exploration area at Xarxar where a high-grade quartz gold vein has been discovered. The initial exploration phase which started in 2023 was completed in 2024. The results of the initial exploration phase were not positive.

Garadag

No geological field work was carried out at Garadag in 2024.  Scanning of the existing Garadag drill core was also undertaken using TerraCore technology. Extensive analytical work was also required for the preparation of the maiden JORC mineral resources estimate of the Garadag deposit. This was published on 24 September 2024 and is set out in Table 7 above.

Cayir (Ashagi Cayir)

This is a new exploration area in the Garadag Contract Area. Geochemical testing was carried out in 2024 with 897 soil samples and 50 rock samples collected. 947 outcrop samples were also collected. Results indicate that the area warrants further exploration with positive results for gold, silver and occasionally copper. Alteration mapping and geophysical surveys were also completed. The result so far indicate that the area warrants further geological exploration.

Ordubad

1,470 metres of trenching were carried out in the Dirnis and Destabashi areas. Trenches were dug with a depth of 10 metres. Results show that mineralisation thickness increases by about 30 per cent. 10 metres below the surface.

Vejnaly

No geological fieldwork was carried out in 2024 as the Group did not have access to the Contract Area.

A "WorldView-3" study was completed by an independent company, "Exploration Mapping USA", and a map prepared identifying mineralisation targets. Once access to the Contract Area is restored, in-house geological fieldwork will start exploring known gold targets and targets identified by the "WorldView-3" study.

Demirli

Geological evaluation of the deposit commenced in 2024. The Demirli mine geological map was digitised and digitising historical drill hole data was carried out.

A reverse circulation drill programme commenced in 2024. 898 reverse circulation drill holes were completed to a depth of 10 metres each with a total depth of 8,980 metres. The purpose of the programme was to determine the remaining resource in the current open pit which will be the start-up resource. The start-up resource size has been estimated to be 58.3 million tonnes of ore with an average copper grade of 0.41 per cent. copper containing 239 thousand tonnes of copper. This internal estimate is set out in Table 9 above.

Sale of the Group's products

Important to the Group's success is its ability to transport its production to market and sell them without disruption.

In the year ended 31 December 2024, the Group shipped all its gold doré to Switzerland for refining by MKS Finance SA. The logistics of transport and sale are well established and gold doré shipped from Gedabek arrives in Switzerland within three to five days. The proceeds of the estimated 90 per cent. of the gold content of the doré can be settled within one to two days of receipt of the doré. The Group, at its discretion, can sell the resulting refined gold bullion to the refiner.

The Gedabek mine site has good road transportation links and copper and precious metal concentrate is collected by truck from the Gedabek site by the purchaser. The Group sells its copper concentrate to three metal traders as detailed in note 6 to the Group financial statements. The contracts with each metal trader are periodically renewed and each new contract requires the approval of the Government of Azerbaijan.

Libero Copper & Gold Corporation ("Libero")

The Company's shareholding in Libero was reduced to 5.7 per cent. in February 2024 following a refinancing in which the Company did not participate. Michael Sununu also resigned from the Libero board in February 2024. Libero ceased to be an associated company from February 2024 and the Group's interest is held as an equity investment.

Further information can be found at https://www.liberocopper.com/. 

Section 172(1) Statement

Introduction

The board of directors of Anglo Asian Mining PLC (the "Board") considers that it has adhered to the requirements of section 172 of the Companies Act 2006 (the "Act") and, in good faith, acted in a way that it considers would be most likely to promote the success of the Company for the benefit of its shareholders as a whole. In acting this way, the Board has recognised the importance of considering all stakeholders and other matters as set out in section 172(1) (a to f) of the Act in its decision making.

The Board members are directors of Anglo Asian Mining PLC, a holding company for the Group. The Group carries out its business of mineral exploration and mining in Azerbaijan and elsewhere through its wholly owned subsidiaries and other investments. Given the nature and size of the Group, the Board considers it reasonable that executive decision making for the entire Group, including its subsidiaries in Azerbaijan, is the responsibility of the Board. The section 172(1) statement has accordingly been prepared for the entire Group.

The commentary and table below sets out the Company's section 172(1) statement. This statement provides details of key stakeholder engagement undertaken by the Board during the year and how this helps the Board to factor in potential impacts on stakeholders in the decision making process.

General

The Group promotes the highest standards of governance as set out in Corporate Governance in the Group's annual report. The principles of Corporate Governance underpin how the Board conducts itself. The Board is very conscious of the impact that the Group's business and decisions has on its direct stakeholders as well as its societal impact. The Company operates to the highest ethical standards as discussed in Corporate Governance section of the Group's annual report.

Principal decisions and other key factors in maintaining shareholder value

For the year ended 31 December 2024, the Board considers that the following are examples of the principal decisions that it made in the year:

· consideration and agreement of the Group's budget for the year ending 31 December 2024;

· committing to implement the Global Industry Standard on Tailings Management ('GISTM') at its operations at Gedabek;

· establishment of a Group sustainability committee chaired by Professor John Monhemius;

· entering into a $3.7 million vendor financing facility to part refinance the purchase price of its Caterpillar underground mining fleet;

· refurbishing the production facility at Demirli with the aim of restarting production following obtaining access to the Contract Area in mid-2024;

· entering into a $5.0 million concentrate prepayment facility with a metal trader;

· agreement to the Government of Azerbaijan revising the Group's Production Sharing Agreement ("PSA") so that AzerGold Closed Joint Stock Company became the local party to the PSA;

· fully restarting production at the Gebabek production plant following obtaining permission to raise the wall of its tailing dam;

· changing the auditors of the Group from Ernst & Young LLP to BDO LLP for the year ending 31 December 2024

· issuing production guidance for 2024 following recommencement of full production in late 2024; and

· continuing extensive investigation of the geological data obtained for the Garadag resource and publication of a JORC mineral resources estimate in September 2024.

The Group, like all companies operating in the extractive industries, is required to continually replace and increase its mineral reserves to maintain and improve the sustainability of its business. This concern is a high priority of the Board. To address this priority, the Company has an active geological exploration campaign at its Contract Areas to which it has access. The Board monitors the campaign through regular reports and site visits by directors whenever possible.

The Board, together with their immediate families, and senior managers of the Company hold in total approximately 44 per cent. of the shares of the Company with the remainder held by a wide range of individual and institutional shareholders. The Board is extremely mindful that all shareholders must be treated equally. This is reflected in the Board's behaviour to ensure decisions do not disadvantage external shareholders compared to the interests of directors and senior management and that external shareholders are fully informed of all Company developments in a timely manner.

Engagement with key stakeholders

The table below sets out the Board's key stakeholders and provides examples of how the Board engaged with them in the year as well as demonstrating stakeholder consideration in the decision-making process. However, the Board recognises that, depending on the nature of an issue, the interests of each stakeholder group may differ. The Board seeks to understand the relative interests and priorities of each stakeholder and to have regard to these, as appropriate, in its decision making. However, the Board acknowledges that not every decision it makes will necessarily result in a positive outcome for all stakeholders.

Principal risks and uncertainties

Country risk in Azerbaijan

The Group's wholly owned operations are solely in Azerbaijan and are therefore at risk of adverse changes to the regulatory or fiscal regime within the country. However, Azerbaijan is outward looking and desirous of attracting direct foreign investment and the Company believes the country will be sensitive to the adverse effect of any proposed changes in the future. In addition, Azerbaijan has historically had a stable operating environment and the Company maintains very close links with all relevant authorities.

Operational risk

The Company currently produces all its products for sale at Gedabek. Planned production may not be achieved as a result of unforeseen operational problems, machinery malfunction or other disruptions. Operating costs and profits for commercial production therefore remain subject to variation. The Group monitors its production daily and has robust procedures in place to effectively manage these risks.

Commodity price risk

The Group's revenues are exposed to fluctuations in the price of gold, silver and copper and all fluctuations have a direct impact on the operating profit and cash flow of the Group. Whilst the Group has no control over the selling price of its commodities, it has very robust cost controls to minimise expenditure to ensure it can withstand any prolonged period of commodity price weakness. The Group actively monitors all changes in commodity prices to understand the impact on its business. The directors keep under review the potential benefit of hedging which it carries out from time to time.

Foreign currency risk

The Group reports in United States Dollars and a large proportion of its costs are incurred in United States Dollars. It also conducts business in Euros, Azerbaijan Manats and United Kingdom Sterling. The Group does not currently hedge its exposure to other currencies, although it continues to review this periodically.

Liquidity and interest rate risk

The Group utilised various credit lines from several banks in Azerbaijan throughout 2024. This was primarily to provide working capital during the partial suspension of the Group's operations. The banks loans were all at a fixed rate of interest and therefore the Group had no interest rate risk in respect of bank loans during 2024.

The Group also utilised a vendor financing facility which carries interest at a rate of CME Term SOFR plus a margin of 2 per cent. Given the size of the borrowing and relative stability of interest rates, the Group does not consider that this variable rate presents any material interest rate risk to the Group.

Russian invasion of Ukraine

The Company is unaffected directly by the Russian invasion of Ukraine or the international sanctions levied against various private and governmental Russian entities. However, the Company is subject to the global macro-economic conditions resulting from the Russian invasion such as higher input costs.

Key performance indicators

The Group has adopted certain key performance indicators ("KPIs") which enable it to measure its financial performance. These KPIs are as follows:

1 Profit before taxation. This is the key performance indicator used by the Group. It gives insight into cost management, production growth and performance efficiency.

2 Net cash provided by operating activities. This is a complementary measure to profit before taxation and demonstrates conversion of underlying earnings into cash. It provides additional insight into how we are managing costs and increasing efficiency and productivity across the business in order to deliver increasing returns.

3 Free cash flow ("FCF"). FCF is calculated as net cash from operating activities, less expenditure on property, plant and equipment and mine development, and Investment in exploration and evaluation assets including other intangible assets.

Reza Vaziri

President and chief executive

21 May 2025

Financial review

Currency of financial review

References to "$" and "cents" are to United States dollars and cents. References to "£" and "p" are to United Kingdom Sterling pounds and pence. References to AZN are to the Azerbaijan New Manat.

Group statement of income

The Group generated revenues in 2024 of $39.6m (2023: $45.9m) from the sales of gold and silver bullion and copper and precious metal concentrate.

The revenues in 2024 included $37.1m (2023: $31.0m) generated from the sales of gold and silver bullion from the Group's share of the production of doré bars. Bullion sales in 2024 were 15,251 (2023: 15,822) ounces of gold and 10,563 (2023: 7,080) ounces of silver at an average price of $2,432 (2023: $1,951) per ounce and $29 (2023: $23) per ounce respectively. In addition, the Group generated revenue in 2024 of $2.5m (2023: $14.8m) from the sale of 1,519 (2023: 11,192) dry metric tonnes of copper and precious metal concentrate. The Group's revenue benefited in the year from a higher average price of gold at $2,390 (2023: $1,943) per ounce and a higher average price of copper at $9,267 (2023: $8,523) per tonne. Production was lower in 2024 compared to 2023 due to the partial suspension of processing throughout the first three quarters of the year.

The Group incurred cost of sales in 2024 of $49.7m (2023: $50.3m) as follows:

The cost of sales in 2024 of $49.7m were $0.6m lower than the $50.3m in 2023. Cash cost of sales in 2024 at $30.8m were $9.2m lower than $40.0m in 2023. This was because agitation leaching, flotation processing and mining were suspended from January to quarter four of 2024. Reagent costs, materials and consumables including spare parts and fuel oil, and haulage and excavation services were $1.6m, $3.0m and $3.7m lower respectively in 2024 compared to 2023. The charge for inventory movement of $9.1m (2023: $1.7m) primarily resulted from a decrease of gold in circuit and the tailings dam of $6.7m and bullion of $3.6m. The decrease in gold in circuit and tailings dam resulted from lower production and lower gold in the tailings dam. The lower bullion resulted from a delay in shipment of gold bullion at 31 December 2023.

Depreciation of owned assets in 2024 was higher at $10.5m compared to $9.7m in 2023. Accumulated mine development costs within producing mines are depreciated and amortised on a unit-of-production basis over the economically recoverable reserves of the mine concerned or by the straight-line method. The depreciation and amortisation were higher in the year due to a change in methodology in calculating the cost of the producing mines which are depreciated. These costs now include future expected capital expenditure of the cost of a second tailings dam at Gedabek which will be required to process the economically recoverable reserves. This was partially offset by the lower production in 2024.

Other operating income in 2024 was $1.3m (2023: $0.4m) The income in 2023 and 2024 was primarily the cancellation of amounts payable to contractors. Administration expenses in 2024 were $6.6m (2023: $7.0m). Administration expenses comprise the cost of the administrative staff and associated costs at the Gedabek mine site, the Baku office and maintaining the Group's listing on AIM. The majority of the administration costs are incurred in either Azerbaijan New Manats, the United States dollar or United Kingdom pounds sterling. The Azerbaijan New Manat was stable against the US dollar in 2024 compared to 2023 at an exchange rate of $1 equals AZN1.7. The United States dollar to the United Kingdom pounds Sterling exchange rate was relatively volatile in 2024 with a high of £1 equals $1.34 to a low of £1 equals $1.23. Administration costs in 2024 were lower than 2023 primarily due to lower consulting fees. 2023 administration costs included consulting costs arising from the partial environmental shutdown.

Finance costs in 2024 were $3.0m (2023: $1.8m). Finance costs comprise interest on borrowings and lease liabilities, interest on unwinding the discount on provisions, interest on deposit received from a customer and interest on the AzerGold CJSC creditor. Finance costs increased in 2024 compared to 2023 due to the Group's increase in borrowings in 2024.

The Group reversed of an impairment charge in 2024 of $0.4m (2023: charge of $5.0m) in respect of its investment in Libero Copper & Gold Corporation ("Libero"). Libero was an associate company at 31 December 2023 but on 15 February 2024 was reclassified as a financial asset as the Group's interest reduced to 5.7 per cent. in January 2024 and Michael Sununu resigned from the board of Libero. The reversal of the impairment charge arose due to an increase in the share price of Libero between 1 January and 15 February 2024. The market value of the Group's shares in Libero at 31 December 2024 was $475,000 and the investment was accordingly included at this value as a non-current financial asset in the Group balance sheet at 31 December 2024.

The Group recorded an impairment charge in 2024 in respect of its historical geological exploration expense of $1.3m (2023: $13.0m). This was in respect of its Avshancli deposit in the Gedabek contract area.

The Group recorded a loss before taxation in 2024 of $21.3m (2023: $32.0m). The loss was mainly due to the gross loss of $10.1m resulting from the partial suspension of Gedabek processing in the first three quarters of 2024, administration expenses of $6.6m and finance costs of $3.0m.

The Group had a taxation benefit in 2024 of $3.8m (2023: $7.7m). This comprised a current income tax charge of $nil (2023: $nil) and a deferred tax benefit of $3.8m (2023: $7.7m). R.V. Investment Group Services ("RVIG") in Azerbaijan generated taxable losses in 2024 of $5.1m (2023: $17.3m). RVIG's taxable profits are taxed at 32 per cent. (the corporation tax rate stipulated in the Group's production sharing agreement). RVIG had tax losses available for carry forward of $22.4m at 31 December 2024 (2023: $17.3m).

All-in sustaining cost of gold production

The Group will not report an AISC of gold produced in 2024. The Group's costs in 2024 include substantial non-production costs such as maintaining the entire Gedabek site together with the idle plant, and the cost of the Gedabek workforce, a large proportion of whom were placed on administrative leave. The AISC metric is therefore not meaningful for 2024.

Group statement of financial position

Assets

Non-current assets increased from $95.2m at the end of 2023 to $103.7m at the end of 2024. Intangible assets decreased by $3.1m from $27.1m at the end of 2023 to $24.0m at the end of 2024 due to transfers of intangible assets to assets under construction at Gedabek of $3.6m, amortisation of $0.4m and impairment of $1.3m. This was partially offset by additions of $2.2m (2023: $5.9m). Property, plant and equipment were higher by $6.8m due to additions of $9.3m and transfer from intangibles of $3.6m partially offset by depreciation of $10.5m. The rehabilitation provision also increased by $5.0m. Right of use assets were $0.4m lower in 2024 compared to 2023. Additions of $0.4m were partially offset by depreciation of $0.7m.

Current assets decreased by $16.6m to $42.9m at 31 December 2024 compared to $59.5m at 31 December 2023. The main reason for the decrease was a decrease of cash of $3.6m and inventories of $15.6m partially offset by an increase in trade and other receivables of $2.6m. Current inventories decreased by $15.6m due to a decrease in gold bullion of $3.6m, lower metal in circuit and in tailings dam of $6.7m and lower ore stockpiles of $4.8m. There were 1,055 ounces of gold bullion in inventory at 31 December 2024 (31 December 2023: 3,359 ounces). Gold in the tailings dam was 217 ounces (2023: 3,114 ounces) valued at $0.5m (2023: $4.9m). The decrease in the gold in the tailings dam resulted from lower production. The lower ore stockpiles resulted from $5.7m of ore being reclassified as non-current inventory. That the Group is now back in full production and Gilar has started production means that this ore will not be processed in 2025. Trade and other receivables increased by $2.6m due to an increase of $5.5m of gold held on behalf of the Government of Azerbaijan. This was 2,862 ounces of gold valued at the market price of gold at 31 December 2024. This balance is offset by an other creditor of equal amount.

The Group's cash balances at 31 December 2024 were $0.9m (31 December 2023: $4.5m) and restricted cash of $6.0m (31 December 2023: $6.0m) which is not available for use by the Group as it is security for a loan. Surplus cash during the year was maintained in US dollars and was placed on fixed deposit with banks in Azerbaijan at tenors of between one to three months at interest rates of around 1.5 to 4.0 per cent. 

Liabilities

Current liabilities at 31 December 2024 were $38.9m (31 December 2023: $23.4m). Trade and other payables increased by $10.5m. Trade creditors increased from $2.7m at 31 December 2023 to $5.5m at 31 December 2024 as a result of actions to manage working capital. Gold held on behalf of the Government of Azerbaijan increased from $2.0m to $7.5m as set out above in current assets. Current liabilities at 31 December 2024 also included a $3.4m (31 December 2023: $nil) creditor for geological data. This amount was reclassified to current from non-current liabilities in 2024 as it is due for payment in 2025.

The Group commenced borrowing in 2023 to finance the capital expenditure of developing its assets and the partial suspension of processing operations from August 2023. Total bank borrowings at fair value including interest at 31 December 2024 were $21.6m (31 December 2023: $20.7m). Three loans totalling $5.0m from the International Bank of Azerbaijan ("IBA") which matured in May 2024 were consolidated into one loan of $5.0m at 6 per cent. per annum and extended till May 2025. In May 2025, it was further extended to May 2026. The Group also had an existing $10.0m loan from IBA at 6.5 per cent. per annum of which $7.9m was outstanding at 31 December 2024 (2023: $10.0m). The Group also had a loan from Access Bank of $5.6m throughout the year which was secured against a $6.0m cash deposit. The loan from Access Bank was extended to November 2025.

The Group received the proceeds of a vendor financing facility with Caterpillar Financial Services Corporation ("Caterpillar") in 2024 of $3.7m.  The interest rate is CME Term SOFR rate plus a margin of 2 per cent. and repayment of capital is by 12 equal quarterly instalments. The amount outstanding at 31 December 2024 was $3.1m. The loan is subject to net debt to EBITDA and net worth covenants. The Group did not comply with these covenants at 31 December 2024 and therefore in accordance with the amendments to IAS1, the entire loan has been classified as a current liability. The net worth covenant at 31 December 2024 had been waived by Caterpillar as part of the terms of the loan. Subsequent to 31 December 2024, the Group was granted a waiver by Caterpillar of the net debt to EBITDA covenant at 31 December 2024.

Non-current liabilities included trade and other payables of $0.5m (2023: $4.2m). 2023 included $3.1m in respect of the purchase of historical exploration data of Xarxar and Garadag. This liability is payable in 2025 and has been included in current liabilities at 31 December 2024.

Net assets

Net current assets were $3.9m at the end of 2024 compared to $36.1m at the end of 2023. The net current assets decreased due to an increase in current liabilities of $15.6m and a decrease in current assets of $16.6m.

Net assets of the Group at the end of 2024 were $67.4m (2023: $84.8m). The net assets were lower due to a decrease in retained earnings as a result of the loss in 2024. There were no shares issued or bought back in 2024.

Equity

The Group's gearing ratio at 31 December 2023 and December 2024 was 27.4 per cent. and 35.3 per cent. respectively. The calculation of the gearing ratio is set out in note 25 - financial instruments to the Group financial statements.

There were no movements of the Group's share capital, merger reserve and share premium account in 2024. The Group's holding company did not buy back any ordinary shares in 2023 or 2024. 150,000 ordinary shares were bought back in 2022 which have not been cancelled and are held in treasury. No dividends were paid in 2024.

Group cash flow statement

Operating cash outflow before movements in working capital for 2024 was $6.6m (2023: $1.0m). Operating cash was severely reduced in the year due to the lower production arising from the suspension of processing.

Working capital movements generated cash of $15.2m (2023: $2.0m) due to a decrease in inventories which were lower by $9.9m (2023: higher by $0.1m) and trade and other receivables which were lower by $3.4m (2023: $4.6m).

Cash from operations in 2024 was $8.6m compared to $1.0m in 2023 due to the cash flow from working capital of $13.9m.

The Company paid corporation tax in 2024 of $nil (2023: $0.1m) in Azerbaijan in accordance with local requirements as it incurred losses. The payment in 2023 was the final payment of its liability for the year ended 31 December 2022. The Group has tax losses carried forward in Azerbaijan at 31 December 2024 of $22.4m (2023:17.3m).

Expenditure on property, plant and equipment and mine development in 2024 were $8.9m (2023: $18.0m). The main additions in 2024 were the development costs of the Gilar mine and the cost of the first stage of the Gedabek tailings dam wall raise.

Expenditure on intangible assets in 2024 was $2.1m (2023: $7.2m) which was expenditure on exploration and evaluation. The main expenditure on exploration and evaluation expenditure was $0.7m (2023: $2.1m), $0.5m (2023: $0.6m) and $0.4m (2023: $0.1m) at Gedabek, Ordubad and Garadag respectively. Expenditure on exploration and evaluation in 2024 was curtailed to conserve funds due to the partial suspension of processing in the year.

Dividends

In respect of the year ended 31 December 2024, the Group did not pay an interim dividend and no final dividend is proposed (2023: $nil).

A legal review was carried out in early 2025, of the distributions made to shareholders by Anglo Asian Mining plc, following an enquiry from the United Kingdom Financial Reporting Council in late 2024. The review found that the Group's subsidiaries have ample distributable reserves, which can be distributed to Anglo Asian Mining PLC, to pay dividends to shareholders and buy back shares. However, certain technical provisions of the Companies Act 2006 had not been complied with in making those distributions. To rectify the situation, various actions will be undertaken to correct the situation in 2025 following the Group's annual general meeting for 2025 including convening a general meeting so shareholders can approve the required resolutions.

Production Sharing Agreement

Under the terms of the Production Sharing Agreement (the "PSA") with the Government of Azerbaijan (the "Government"), the Group and the Government share the commercial products of each mine. The Government's share is 51 per cent. of "Profit Production". Profit Production is defined as the value of production, less all capital and operating cash costs incurred during the period when the production took place. Profit Production for any period is subject to a minimum of 25 per cent. of the value of the production. This is to ensure the Government always receives a share of production. The minimum Profit Production is applied when the total capital and operating cash costs (including any unrecovered costs carried forward from previous periods) are greater than 75 per cent. of the value of production. All operating and capital cash costs in excess of 75 per cent. of the value of production can be carried forward indefinitely and set off against the value of future production.

Profit Production and unrecovered costs are calculated separately for each Contract Area from the total production and total costs for each Contract Area. Costs incurred in one Contract Area cannot be offset against production of a different Contract Area. Unrecovered costs can only be recovered against future production from their respective contract area.

Profit Production for the Group has been subject to the minimum 25 per cent. for all years since commencement of production including 2024 for the Gedabek Contract Area. The Government's share of production in 2024 (as in all previous years) was therefore 12.75 per cent. being 51 per cent. of 25 per cent. with the Group entitled to the remaining 87.25 per cent. The Group was therefore subject to an effective royalty on its revenues in 2024 of 12.75 per cent. (2023: 12.75 per cent.) of the value of its production at Gedabek.

The Group produced gold and silver for the first time in 2021 from its Vejnaly Contract Area and the metal produced was sold for a total of $1.6m in 2023. The Government's share of this production was 32.0 per cent. This is because the mine and other facilities were acquired at no cost and the only costs available to offset the production were the administration costs of the site, minor refurbishment capital expenditure, the cost of geological exploration and Gedabek transport and processing costs. Mining costs were not available for offset as the metal was produced from ore stockpiled at Vejnaly by the previous owner.

The Group can recover the following costs in accordance with the PSA for each Contract Area as follows:

· all direct operating expenses of the mine;

· all exploration expenses;

· all capital expenditure incurred on the mine;

· an allocation of corporate overheads - currently, overheads are apportioned to Gedabek according to the ratio of direct capital and operating expenditure at the Gedabek contract area compared with direct capital and operational expenditure at the Gosha and Ordubad contract areas; and

· an imputed interest rate of United States Dollar LIBOR + 4 per cent. per annum on any unrecovered costs.

The total unrecovered costs (operating costs and capital expenditure) for the Group's eight contract areas are as follows:

\* The unrecovered costs include cash payments for historical geological data of $0.8m and $0.2m in respect of Garadag and Xarxar respectively.

Foreign currency exposure

The Group reports in US dollars and a substantial proportion of its business is conducted in either US dollars or the Azerbaijan Manat ("AZN") which has been stable at AZN 1 equalling approximately $0.58 during the year ended 31 December 2024. The Company's revenues and its debt facility are also denominated in US dollars. The Company does not currently have any significant exposure to foreign exchange fluctuations and the situation is kept under review.

Calculation of non-IFRS financial indicators

Net debt / cash

Calculated as the cash and cash equivalents minus current and non-current interest-bearing loans and borrowings.

Free cash flow

Calculated as net cash from operating activities less expenditure on property, plant and equipment and mine development and, Investment in exploration and evaluation assets including other intangible assets.

Going concern

Preparation of financial statements on a going concern basis

The directors have prepared the Group financial statements on a going concern basis after reviewing the Group's forecast cash position for the period to 30 June 2026 (the "going concern review period") and satisfying themselves that the Group will have sufficient funds on hand to meet its obligations as and when they fall due over the period of their assessment. Appropriate rigour and diligence have been applied by the directors who believe the assumptions are prepared on a realistic basis using the best available information.

Main business of the Group

The Group produces primarily gold and copper at its Gedabek mining concession in northwestern Azerbaijan. Ore mined at Gedabek produces gold doré by heap and agitation leaching and copper concentrate (which also contains gold and silver) from SART and flotation processing. The Group's new Gilar underground mine will also substantially increase production in 2025 as its ore is much richer than from its current mines. The Gilar mine extracted its first ore in March 2025 and started production in May 2025 with production ramping up to 50,000 to 60,000 tonnes per month.

The Group is also expecting to start copper production from its Demirli plant in the going concern review period with first production expected in the second half of 2025.

Curtailment of agitation leaching and flotation processing and tailings dam wall raise in 2024

Agitation leaching and flotation processing was suspended throughout most of 2024 whilst permission was obtained from the Government of Azerbaijan (the "Government") to raise the wall of its tailings dam. Permission was obtained in August 2024, and the first raise of the tailings dam wall was completed in November 2024. Agitation leaching recommenced in September 2024 and flotation processing in November 2024. It is expected the second raise of the tailings dam wall will be completed in the second half of 2025. This will give the tailings dam enough capacity for production at Gedabek for the next two to three years.

Start of production from Demirli

The Group's Demirli plant is expected to start production in the second half of 2025. A $7.0 million loan is being finalised to finance the refurbishment of the plant. The plant is expected to be cash generative once in production. Any initial cash shortfalls as it commences production due to working capital or other requirements can be met from the cash generated from the Group's Gedabek operations. The Group is also finalising a contract with Trafigura Pte Ltd. ("Trafigura") for the purchase of its copper concentrate produced at Demirli. The contract will include a revolving prepayment facility of up to $25 million at an interest rate of SOFR plus 4 per cent. per annum.

Financial condition and credit facilities available to the Group

The Group had cash reserves of $12.5 million (including $6.0 million restricted cash) and debt of $21.3 million at 31 March 2025. The directors have prepared a cash flow forecast for the Gedabek site that assumes production is consistent with the business plan and a gold price of $2,600 to $2,800 for 2025 and 2026.

The Gedabek site cash flow forecast shows the Group is able to fund its working capital requirements from cash generated from its operations at Gedabek. The cash flow also shows that the Group is able to fund its capital expenditure requirements at Gedabek from its existing cash flow. The Group generated $1.0 million of overall positive cash flow in the first quarter of 2025. A cash flow forecast has also been prepared for the Group's new Demirli operation which shows that production will be cash positive from the start of production.

The Group has in place an AZN 55 million ($32.3 million) General credit agreement with the International Bank of Azerbaijan ("IBA") with minimal conditions on drawdown. The Group has borrowed $10.0 million under this facility of which $2.2 million was repaid in 2024. The balance is repayable between May 2025 to May 2026. The Group has also borrowed $5.0 million under the facility which was originally repayable in May 2024. The repayment of the $5.0 million loan was extended by one year to May 2025, and in May 2025 was further extended by one year to May 2026. The Group is currently finalising a further $7.0 million loan under the General credit agreement. This loan of $7.0 million will be used to fund the refurbishment of Demirli operation.

The Group also finances its operations using concentrate prepayment facilities established with Trafigura and other offtakers. A 3-month revolving, $5.0 million to $10.0 million prepayment facility has been established with Trafigura for concentrate produced at Gedabek. At 31 March 2025, $5.0 million was outstanding under this facility. The Group is also finalising a contract with Trafigura Pte Ltd. ("Trafigura") for the purchase of its copper concentrate produced at Demirli. The contract will include a revolving prepayment facility of up to $25 million at an interest rate of SOFR plus 4 per cent. per annum.

The Group closed a vendor refinancing in 2024 as part of the purchase consideration of its Caterpillar mining fleet and received proceeds of $3.7 million. $2.8 million is outstanding at 31 March 2025 and the loan will be repaid in quarterly instalments with the final instalment in July 2027. The Group was in breach of the net worth and net debt to EBITDA covenants of the loan at 31 December 2024. However, subsequent to 31 December 2024, the Group was granted a waiver of the net debt to EBITDA covenant at 31 December 2024. The net worth covenant was not in force at 31 December 2024.

Directors' going concern opinion

The Group's business activities, together with the factors likely to affect its future development, performance and position, can be found within the chairman's statement, the president and chief executive's review and the strategic report above. The financial position of the Group, its cash flow, liquidity position and borrowing facilities are discussed within the financial review above. In addition, note 25 to the Group financial statements below includes the Group's financial management risk objectives and details of its financial instrument exposures to credit risk and liquidity risk.

After making due enquiry, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the annual report and financial statements.

William Morgan

Chief financial officer

21 May 2025

Directors emoluments

Directors' fees and consultancy for 2023 and 2024 were paid in cash.

No director held or exercised any share options during the years ended 31 December 2023 and 31 December 2024.

Group statement of income

year ended 31 December 2024

Group statement of comprehensive income

year ended 31 December 2024

* These are gross amounts and the tax effect is $nil

Group statement of financial position

31 December 2024

Group statement of cash flows

year ended 31 December 2024

Group statement of changes in equity

year ended 31 December 2024