The Company holds mining and exploration rights for a period of up to 25 years from 26 February 2007 over the 300 square kilometres Gedabek Contract Area, which is 55 kilometres from Azerbaijan’s second biggest city, Ganja. The area includes Azerbaijan’s first operating gold mine as well as a number of exploration targets.

Mining activity at Gedabek is reported to have started as long as 2,000 years ago. More recent activity began around 1849 when the Mekhor Brothers, followed by the German Siemens Bros Company, developed and operated a copper mine at Gedabek. At least five large (>100,000 tonne) and numerous smaller sulphide lenses were mined during the period between 1849 and 1917. Mining activity ceased in 1917 with the onset of the Russian Revolution.

Mining activity commenced once more when Anglo Asian began construction of an open pit mine and a conventional heap leach and processing facility for the recovery of gold, copper and silver in 2008. The Company poured its first gold in May 2009, making it the first gold/copper producer in Azerbaijan in modern times. Since that time it has seen steady gold production as efficiencies of the mine continue to improve. In addition, in 2015 the Group commenced production from Gadir, an underground mine co-located at Gedabek.

Mining operations

The principal mining operation at the Gedabek contract area is conventional open-cast mining using truck and shovel from the Gedabek open pit (which comprises several contiguous smaller open pits). Ore is first drilled and blasted and then transported either to a processing facility or to a stockpile for storage. The major mining activities of blast-hole drilling and haulage of ore and waste rock are carried out by contractors, while blasting and mining activities are carried out by the Company.

Ore is also mined from the Gadir underground mines and Gedabek.

Table 1 shows the ore mined in 2022 from all the Company’s mines at Gedabek and Gosha.

Table 1 – Ore mined at Gedabek from all mines for the year ended 31 December 2022

 

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 by 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. This plant selectively absorbs then de-absorbs the gold and silver. The gold and silver dissolved in the solution which is produced are then recovered by electrolysis and are then smelted to produce the doré metal, comprising 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:
    Flotation is carried out in a separate flotation plant. Feedstock is mixed with water to produce a slurry called “pulp” and other 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.

Production and sales

For the year ended 31 December 2022, gold production totalled 43,114 ounces, which was a decrease of 5,566 ounces in comparison to the production of 48,680 ounces for the year ended 31 December 2021.

Table 2 – Ore and its gold grade processed by leaching at Gedabek for the year ended 31 December 2022.

Table 2 summarises the amount of ore and its gold grade processed by leaching at Gedabek for the year ended 31 December 2022.

 

Table 3 – Ore and its gold, silver and copper content processed by flotation for the year ended 31 December 2022

Table 3 summarises the amount of ore and its gold, silver and copper content processed by flotation for the year ended 31 December 2022.

 

Table 4 – Gold and silver bullion produced from doré bars and sales of gold bullion for the year ended 31 December 2022

Table 4 summarises the gold and silver bullion produced from doré bars and sales of gold bullion for the year ended 31 December 2022.

* including Government of Azerbaijan’s share.
** excluding Government of Azerbaijan’s share.

 

Table 5 – Total copper, gold and silver produced as concentrate by both SART and flotation processing for the year ended 31 December 2022

Table 5 summarises the total copper, gold and silver produced as concentrate by both SART and flotation processing for the year ended 31 December 2022.

 

Table 6 – Total copper concentrate (including gold and silver) production and sales from both SART and flotation processing for the year ended 31 December 2022

Table 6 summarises the total copper concentrate (including gold and silver) production and sales from both SART and flotation processing for the year ended 31 December 2022.

* including Government of Azerbaijan share

Infrastructure

The Gedabek contract area is served by excellent infrastructure. The main site is located at the village of Gedabek which is connected by a good tarmacadam road to the regional capital of Ganja. Baku, the capital of Azerbaijan to the south and the country’s border with Georgia to the north, are both approximately a four to five hour drive over excellent roads. The site is connected to the Azeri national power grid and there is a dedicated sub-station located at the main Gedabek processing facilities.

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 village has experienced water shortages in the summer and this plant reduces to the absolute minimum the consumption of fresh water required by the Company.

Wastewater evaporation equipment is also deployed in the tailings dam. This is mobile, skid mounted equipment into which water is pumped without treatment direct from the tailings dam. The equipment then evaporates the water by jetting it into the atmosphere as a fine spray. It can evaporate approximately 25 litres per second of water depending upon climatic conditions.

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 discharge into the nearby Shamkir river. The tailings dam has a final capacity of 6.0 million cubic metres which is sufficient to approximately the end of 2023.

A site has been identified for a new tailings dam in the vicinity of the existing dam. The necessary investigations to determine the competency of the bedrock at the proposed site have been successfully completed. The design for the tailings dam has also been finalised. Construction of the new tailings dam was delayed due to an additional Government permit which was required. However, this has now been obtained and detailed planning for the construction of the new dam is underway, together with further geotechnical investigation of the site. To provide tailings storage until the new dam is completed, an auxiliary tailings dam is being constructed close to the new Zafar mine. This is a downstream tailings dam with a 45 metre dam wall and which will be fully lined with a capacity of 1.5 million tonnes. It will be completed around July 2023 and will provide sufficient storage capacity for the next 12 to 18 months. The possibility of a further five metre raise of the wall of the existing dam is being assessed in conjunction with Knight Piésold, a leading firm of geotechnical and environmental consulting engineers.