London-listed Anglo Asian has started to reap the benefits of the actions that it took in the first half of the year to improve production, but warned on Wednesday that the conflict between Azerbaijan and Armenia would likely result in a lower guidance for the year.
The miner, which produces gold, copper and silver in Azerbaijan, reported a 25% increase in production to 18 450 gold-equivalent ounces (GEOs) in the third quarter, from 14 819 GEOs in the second quarter.
“The actions we took to improve production in the first half of the year are now taking effect. We will soon start underground mining below the Gedabek openpit, which is expected to lead to a further improvement in performance,” said Anglo Asian CEO Reza Vaziri.
However, as a result of the Azeri and Armenian conflict, the company said it would likely shave between 5% and 10% off its full-year guidance of between 75 000 GEOs and 80 000 GEOs.
This is the result of delays in the underground development arising from the conscription of a number of engineering staff and recently encountered delays, owing to underground rock faulting.
"We are very saddened by the resumption of the conflict between Azerbaijan and Armenia, especially as the country was recovering well from the Covid-19 pandemic which now seems under control. The length and final resolution of the conflict are currently unknown.
“The company is operating normally but we are experiencing some operational inefficiencies due to the conflict which has required us to review our full-year production guidance. We will update shareholders once the review is finalised,” said Vaziri.
Renewed fighting in and around Nagorno-Karabakh has shattered a ceasefire between Armenia and Azerbaijan over the Nagorno-Karabakh region. It is internationally recognised as part of Azerbaijan, but the enclave is controlled by ethnic Armenians.