Anglo Asian Mining reported output of 15,052 gold-equivalent ounces for April through June, down from 16,740 ounces the previous year. The company’s operations are focused in Azerbaijan. Gold output alone fell to 10,866 ounces from 12,340.
Anglo Asian said it expects to start production at Vejnaly and the Hasan vein at Gosha in the second half of the year. The company also plans to begin production at a significant new mine at Zafer in 2023.
About Anglo Asian Mining PLC
Anglo Asian Mining PLC is a holding company headquartered in the UK. The company provides management and support services to its operational subsidiary, R.V. Financial Group Services LLC (RVIG). Anglo Asian and its subsidiaries explore and develop gold and copper projects in the Republic of Azerbaijan.
The company’s flagship project, the Gedabek gold/copper mine, spans 300 square kilometers and produced 52,068 ounces of gold. Anglo Asian Mining operates the site directly.
The company runs two main business divisions: mining activities and exploration. Both operate within Azerbaijan. Anglo Asian holds a potential portfolio of 1,962 square kilometers of gold and copper assets in various stages of development.
The Ordubad Contract Area covers 462 square kilometers in the Republic of Nakhchivan, Azerbaijan. The Gosha Contract Area spans 300 square kilometers and sits 50 kilometers northwest of Gedabek in western Azerbaijan.
For the fiscal year that ended December 31, 2021, Anglo Asian Mining generated 64,610 gold equivalent ounces (GEOs).
The company completed a private placement in December 2021 to acquire a 19.8% stake in Libero Copper & Gold Corporation (“Libero”). The deal closed in January 2022. Libero owns, or holds the option to purchase, various copper exploration projects across North and South America, and trades on the TSX Venture Exchange in Canada. These properties include Mocoa in Colombia, one of the biggest untapped copper-molybdenum deposits in the world.
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The Government of Azerbaijan adopted changes to its Production Sharing Agreement on July 5, 2022, awarding Anglo Asian three new concessions covering a combined 882 square kilometres of land. This includes the Soviet-classified Garadagh porphyry copper deposit, which holds about 300,000 tonnes of copper. These new concessions reshape Anglo Asian Mining’s asset portfolio entirely and support the company’s strategic goal of becoming a mid-tier copper-focused miner.
Gold Price Drops More Than 2%
Last week, the gold price dropped more than 2%. Analysts expect it to fall even lower, below the $1,800 support level, as a significant rise in the dollar and increasing interest rates dampen demand for the non-yielding asset.
The dollar touched its highest level in about two decades, strengthening its position as investors’ favored sanctuary amid recession concerns. This made the safe-haven metal less appealing to foreign purchasers.
After the US released its CPI report, traders began banking on 175 basis points (bps) of rate increases by September. Some now anticipate a 75 bps increase.
Gold fell to its lowest level in a month following the inflation figures, but it later rose as economic worries gained attention. This week brought increased volatility, as bullion reversed a dramatic decline from a one-month high reached during the Asian session.
A JP Morgan report says the swift unwinding in gold highlights the present struggle between the forces driving its price. Strong inflation is fighting off bets on aggressive policy action. The report adds that an optimistic gold outlook would need clearer evidence that economic expansion is faltering under rising inflation.
This week, central banks around the world took dramatic tightening measures to fight inflation. The US Federal Reserve raised interest rates by the largest margin since 1994.
Gold typically benefits from inflation and economic uncertainty, but rising interest rates raise the cost of holding the non-yielding metal. Analysts note that despite a backdrop of global economic instability and China’s lockdowns, gold’s recent movement has tracked closely with the dollar and bond rates. Demand for physical gold remains muted in China, the world’s largest consumer, due to ongoing COVID-19 restrictions.
Prices have returned to levels seen before 2022 began, hovering around $1,800. Gold’s performance in the second quarter reversed the gains it made earlier in the year, when the spiraling Ukraine-Russia crisis boosted demand for the safe haven.
Ilya Spivak, a currency analyst at DailyFX, expects the bias to turn more pessimistic as rate hikes continue and inflation forecasts ease. He also flagged $1,780-$1,790 as a crucial support level.
Gold remains one of the top-performing assets this year despite a flat year-to-date return that may look unremarkable on the surface. It has generated profits while showing below-average volatility.
Gold has actively helped investors limit losses during this erratic period, especially since both stocks and bonds, which typically dominate investor portfolios, posted negative returns throughout.
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Outlook for Consumer Gold Demand
The difficult economic climate will also affect consumer demand for gold for the rest of the year. A general economic slowdown will pressure consumer demand, even as many economies continue to benefit from the post-COVID rebound. This holds especially true given that many markets are already seeing noticeably higher local gold prices.
China faces particular vulnerability to weakening demand as the government pursues its zero-COVID policy, which may bring further movement restrictions. This casts doubt on the country’s future economic development.
India faces similar, though less severe, challenges with gold demand.
