News & Analysis » UK

Premier Gold Resources, Anglo Asian Mining news briefs

Contributed by Fox-Davies Capital

Premier Gold Resources has released an update on its exploration on the Cholokkaindy licence in Kyrgyzstan. The company has completed its soil geochemistry sampling programme collecting a total of 2,221 samples on a 25x100 metre grid in the four target areas (Talbaital: 466 samples, Jarkonush: 369 samples, Aksai: 856 samples and Torsai: 161 samples).  Although these have yet to be assayed initial results suggest that mineralisation is continuous between the Talbaital prospect, which is the most advanced and the Jarkonush prospect. The company has been preparing to start drilling, but has decided to delay the start of the programme whilst the local management engages in a more intensive educational programme to improve knowledge and understanding among the local communities, and wider areas, about Premier Gold and its objectives at Cholokkaindy. Although keen to get results, it appears prudent to get full stakeholder approval at this early stage.

Anglo Asian Mining has agreed a further US$10.5m loan from the International Bank of Azerbaijan to fund the initial stages of the construction of an agitation leaching plant to improve gold recoveries at Anglo Asian's flagship Gedabek gold/copper/silver mine in Azerbaijan, with the view to commissioning in 1H'13. The IBA has already provided a US$7.5 million loan to the Company, of which US$5.9 million has been drawn down to date and more importantly the IBA has provided Anglo Asian with a letter of intent stating that, subject to internal consideration and approval, it will provide up to an additional US$42M. This would provide adequate funds to complete the construction of the estimated US$52M capex plant which is expected to treat 100 tonnes of ore per hour and initially improve gold recoveries for oxide and sulphide materials to 85% and 69% respectively. An all-inclusive annual interest rate of 12% will apply on funds drawn, payable on a quarterly basis.  The loan can be drawn down in tranches of up to US$1,500,000. Repayment will be within 36 months in equal quarterly instalments starting two years from the date that each tranche of funds is drawn down.  There is no penalty for early repayment. This is very positive for the company as, subject to final approval of the IBA internal management removes the financing risk for the project and if all goes well, Anglo Asian could repay the loan early.