Anglo Asian Mining (LSE: AAZ) has contracted to sell concentrates produced at its newly started Demirli copper mine to global commodities trader Trafigura.
The sales contract includes a revolving prepayment facility of up to $25 million, the Azerbaijan-focused miner said, adding that the first sale will be completed in mid-November.
“The obtaining of all relevant licenses together with the Trafigura sales contract enables us to now commence copper concentrate sales and deliver value from Demirli,” Anglo Asian CEO Reza Vaziri said in a release.
Shares in Anglo Asian rose 7 pence to a 52-week high of £2.20 apiece in early trading before easing 3.5% weaker to close at £2.08 on Monday in London, valuing the company at £237 million (US$312 million.)
The Demirli mine in the Karabakh region of southwestern Azerbaijan completed commissioning in July, the second new operation this year after the at the Gilar underground deposit in May. Demirli is expected to produce 4,000 tonnes in copper concentrate this year before rising to 15,000 tonnes next year. The milestones are part of Anglo Asian’s strategy to transition from gold into a primarily copper producer starting in 2029.
Government approvals
The Azerbaijan government approved the Trafigura contract, licences to operate Demirli’s processing plant and a permit to use the existing tailings dam for up to 12 months, the company said. It plans to construct a second tailings dam.
For nearly 20 years, Anglo Asian has focused mostly on gold, producing mainly from the Gedabek open pit mine.
Demirli hosts 3.4 million indicated tonnes grading 0.47% copper for 16,000 tonnes contained metal and 4.1 million inferred tonnes at 0.38% copper for 15,600 tonnes of the red metal, according to a 2023 resource following Canadian rules.
Gilar has 3.4 million indicated tonnes grading 1.02% copper for 34,700 tonnes contained metal and 4.6 million inferred tonnes at 0.80% copper for 36,800 tonnes of the red metal, according to a 2023 resource following Australian rules.
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