Project of the Week: Anglo Asian Mining - Gedabek

14th March 2022

 

Metals and mining have historically been important industries in the South Caucaus and Azerbaijan. The Caucasus is situated on the Tethyan Belt that runs from the Himalayas to the Balkans. Anglo Asian Mining´s main project, the Gedabek Au-Cu-Ag open-pit and underground mining deposit (Zn-bearing minerals can be found around the west of the orebody), is the second largest operating mine in this part of the former Soviet Union. It is located in the so-called Gadaby region, part of the Lesser Caucasus Mountains which is historically linked to the German Siemens brothers and their modern copper mining operations here in the late 19th century which included a 28-kilometre railway connecting the mines with a copper smelting plant.

Figure 1: Operation mines and exploration areas of Anglo Asian Mining (2020)

The ‘Contract Area’ is approx. 300 km2 in size. Extraction started in 2009 under a Product Sharing Agreement (PSA) with the government. The ore body is a complex copper-gold porphyry deposit, comprising intermixed oxidized, transition and sulphidic gold and copper-bearing ores. Gold in the sulphide ores is generally not refractory and is recoverable by cyanide leaching, but the secondary copper minerals, lead to a high cyanide consumption. Ore processing at Gedabek is by agitation leaching for high grade ore (>1g Au/t) and heap leaching for lower grade ore. The flexible processing facilities can accommodate oxide gold as well as sulphide gold/copper ores.

Figure 2: Location map of the Gedabek ore district - wtihin the dark green area - in relation to major metallogenic belts in Azerbaijan

In 2013, agitation leaching was introduced to operate in parallel with heap leaching, with high grade ore (>1.5 g/t Au) going to agitation leaching and low grade ore (<1.5 g/t Au) going to heap leaching.

Furthermore, as the mine went deeper, the copper grades of the ore tended to increase, which resulted in a rising consumption of cyanide and hence the overall operating costs for producing gold became unacceptably high. To bring the costs down, ammonia was added into the cyanide leaching system to suppress the dissolution of copper, without adversely affecting the extraction of gold. But after about one year of operation, ammonia additions at Gedabek were discontinued because the amount of soluble copper in the leach solutions had decreased naturally due to changes in the ore mineralogy.

Starting with 2015, a flotation plant treats the tailings from the agitation leach plant before the tails are sent to the tailings dam. This produces a copper sulphide  concentrate and recovers some of the residual gold and silver in the tailings too. To reduce the cyanide consumption due to lower gold grades and a rising copper content, the flotation is carried out ahead of the agitation since 2017. The decreased cyanide use and higher metal recoveries improved the process economics by several million USD.

Figure 3: Combined Au and Cu mineralisation wireframes - looking southwest

A significant amount of targeted drilling was carried out in 2017 and 2018, complementing drilling data gained since 2006, to infill areas where mineralisation continuity was less certain, to provide the required data for resource estimation for Gedabek, adjacent Gadir and other areas. The majority of the ore modelled prior to 2006 has since been extracted.

Total production in 2021 of all ooperations (Gedabek, Gosha and Gadir) came within Anglo Asian Mining´s guidance of 64,610 gold equivalent ounces with about 80% of sales being gold. The all in-sustaining costs stood at about 780 USD per ounce, putting them in the lowest quartile of the cost curve globally.

Figure 4: Gedabek Open Pit operations

 

Figure 5: Gedabek Open Pit Mineral Resources (classified according to the JORC Code (2020)

The whole Gedabek ore district is extensive and includes numerous mineral occurrences and prospects (as well as operating mines), the majority of which fall within the designated Gedabek contract area. Anglo Asian Mining works on extending the life of mine at the existing operations as well as the consolidation of nearby land holding in the highly prospective region. At the same time, the production growth plan is accompanied by a greater exposure to  copper. The reserves of the Gedabek and Gadir mines itself are low, standing currently at about 330,000 ounces of gold and 25,000 tonnes of copper. The mine life for the Gedabek open pit operations is just eight years and Gadir and especially an area called Ugur are almost depleted.

Figure 6: Location of mineralisation prospects in relation to the Gedabek open pit

The production start of the Zafar deposit is scheduled for 2023, with an estimated JORC Mineral Resource of 8.47 million tonnes averaging 0.60 % copper, 0.47 % zinc and 0.30 grams per tonne gold as well as 40,000 tonnes of zinc. A gold discovery in an area of the district, called Avshancli, may provide low-cost free digging feed.

Adjacent properties (Gosha, Garadagh and Xarxar) are approved by the Azerbaijan parliament and could add potentially additional 300,000 tonnes of open pit mining copper (0,6% Cu).

Figure 7: Garadagh and Xarxar licenses relative to Gedabek and Gosha

The growth portfolio is complemented by exploration licence areas – primarily Ordubad, Kyzlbulag, Demirli and Vejnaly – in other parts of the country. The latter two are more advanced and host existing mining and processing infrastructure but access may be still restricted for now due to the proximity to Armenian inhabited areas.

The company's long-term outlook has changed fundamentally in the aftermath of the last  Ngorno-Karabakh conflict escalation. The war of 2020 resulted in significant land gains at the expense of neighboring Armenia, unlocking noteworthy mining potential for Anglo Asia Mining. The Company restored three contract areas in the formerly occupied territories and the Karabakh economic region (Soutely, Vejnaly, Kyzlbulag), nearly doubling the company’s land package, whereby the re-development of the Soutely mine is not intended due to the very high investment requirements.

The so-called Zangilan district, which hosts the former Vejnali mine operated by the intermediate owner Vallex Mining (Armenia), has an estimated remaining resource of 230,000 ounces of gold (C1 & C2 categories according to Soviet classification).

The Kyzlbulag Contract Area is the most limited in terms of the site access as it is located in the Karabakh economic region with peacekeepers stationed in the largest regional city, Khankendi. Russian troops are agreed to remain in place for a minimum five years.

Figure 8: Soutely/Soyudlu, Kyzlbulag (hosting Demirli and Gyzilbulakh) and Vejnaly licenses relative to Restored Areas

 

 

References:

https://www.angloasianmining.com/operations/gedabek-contract-area/

Ministry of the Foreign Affairs of the Republic of Azerbaijan, https://www.mfa.gov.az

IJISET - International Journal of Innovative Science, Engineering & Technology, December 2017,  Geological Setting Of The New Discovering Gadir Low Sulfidation Epithermal Deposit, Gedabek Ore District, Lesser Caucasus, Azerbaijan, www.ijiset.com

Flotation and Leaching at Anglo Asian Mining's Gedabek Gold and Copper Mine in Azerbaijan, https://www.researchgate.net/publication/319109721

Datamine, MINERAL RESOURCES REPORT GEDABEK OPEN PIT ANGLO ASIAN MINING PLC January 2019

Following war with Armenia, Azerbaijan gains control of lucrative gold mines, https://eurasianet.org/following-war-with-armenia-azerbaijan-gains-control-of-lucrative-gold-mines

British Anglo Asian Mining signs agreement with Azerbaijan to develop Armenian-controlled mines in Artsakh, https://factor.am/423869.html

 

 

 

 

Herbert Burgstaller

View posts by Herbert Burgstaller
Herbert Burgstaller is a longtime Austrian energy sector & mining company enthusiast. Based in Vienna with a strong professional finance background and longtime interest in various regions of the world. In addition to his work in the financial sector, Herbert is involved in an ´Energy Transition“ advisory boutique where he can also use his passion in the field of battery and other materials.