Azerbaijan’s AzerGold comments on conclusion of contract for Garadagh & Kharkhar sites

Azerbaijan’s AzerGold CJSC has commented on the conclusion of a contract with Anglo Asian Mining PLC, a British producer of gold, copper and silver operating in Azerbaijan, on the exchange of data on the Garadagh and Kharkhar contract areas.

In response to Report’s request, the company informed that, in accordance with the presidential order dated May 25, 2016, AzerGold was instructed to ensure the study, research, exploration, development of the Garadagh, Chovdar, Goydag, Dagkesemen ore areas, the Kokhnemedan area and the deposits of the Kurekchay basin.

“The company is obliged to carry out exploration work at the Garadagh and Kharkhar porphyry copper deposits, which are part of the Garadagh ore deposit, during 2017-2021. In order to digitize geological data on deposits in 2018, the international consulting company SRK Consulting was involved in the process. Thus, historical and geological data on the named areas were digitized, digital geological models of deposits were created. In addition, 3D IP/Res geophysical surveys were carried out at the fields.

In order to ensure the assessment of the resources of deposits in accordance with the requirements of the international classification system established for the economic assessment of mineral deposits - JORC standards, in 2020-2021, within the drilling operations carried out by local CJSC AT-GEOTECH and BLASTO, 140 wells were drilled with a total depth 30,000 meters. Then 10,000 well samples were subjected to chemical analysis. Copper reserves at the Garadagh site are estimated at 380,000-530,000 tons, and Kharkhar at 100,000 tons,” the report says.

Along with this, in 2021, research work was carried out at the Garadagh and Kharkhar sites by IQLIM LTD to assess the current state of the environmental and socio-economic environment, and a corresponding report was drawn up: “Given the location of Anglo Asian Mining PLC in close proximity to Gadabay district, rights related to exploration, development and production at the Garadagh and Kharkhar sites, in accordance with the amendment to the Agreement on Exploration, Development and Production Sharing of Promising Gold Deposits Gadabay, Gosh, Ordubad Group (Piyazbashi, Agyurd, Shekerdere, Keleki), Soyudlu, Gizilbulag and Vajnali,” concluded between the Azergizil State Company of Azerbaijan and R.V. Investment Group Services, LLC, have been transferred to the latter.

Azerbaijan International Mining Company applied to the CJSC in order to get exploration and research data obtained as part of the exploration and research work carried out by AzerGold over the past years. As a result, taking into account the funds spent on exploration and research of the Garadagh and Kharkhar sites, an agreement was signed between AzerGold and Azerbaijan International Mining Company dated August 12, 2022 to provide the latest exploration data on these areas.

The total value of the contract is $4.72 million, including VAT. Thus, AzerGold will receive $3.912 million for data on the Garadagh section, including VAT, and $808,000 for data on the Kharkhar section, including VAT. The advance payment amounted to $1.18 million, including VAT.