Zakir Ibrahimov: “AzerGold” earns more than AZN 280 million from export - INTERVIEW

Chairman of the Executive Board of AzerGold CJSC Zakir Ibrahimov’s interview to Report:

- AzerGold is one of the leading export operations companies in the non-oil sector. What are the total exports and how much did the OJSC earn from the export? How much export is planned for this year?

- AzerGold started production at the Chovdar field in the second half of 2016. To sell the precious metals in international markets, appropriate legal procedures are required. In 2017, AzerGold successfully underwent numerous audit and verification procedures, received positive feedback from international refining companies, signed an agreement with the world-famous Swiss company Argor-Heraeus with more favorable commercial conditions in April 2017, and began exporting gold and silver from the Chovdar field. Since April 2017, income from exports and sales of 128,000 ounces of gold and 194,000 ounces of silver in the international markets exceeded AZN 280 million. To note that it is planned to export 55,000 ounces of gold, of which 23,000 ounces have already been exported.

- How many ounces are produced from the Chovdar deposit today? How many ounces have been produced so far and how many ounces were produced this year?

- Registered in August 2016, AzerGold formed a corporate structure, material and technical base and personnel in a short time. As a result of various repair and construction works, the mine’s activity was restored and optimized, production was switched to 24-hour mode, and working conditions for workers were improved. Until June 30, AzerGold extracted 103,382 ounces of gold and 173,180 ounces of silver from the Chovdar deposit. From January 1 to June 30, 2019, 23,710 ounces of gold and 43,904 ounces of silver were mined. Compared with the first half of 2018, the gold production for the reporting period of 2019 increased by 21%, silver - by 33%.

 - What works are being done for preparation for the underground exploitation of sulfide ores of deep horizons of the Chovdar deposit? How much are these stocks estimated?

- At present the relevant works are being carried out for preparation for the underground exploitation of sulfide ores of deep horizons of the Chovdar deposit. The feasibility study of the project will be completed this year by the international consulting firm Micon International. According to the initial estimates, annual volume of ore exploitation for six years will be 50,000 gold equivalent ounces.

- When will the development in Filizchay deposit commence? What works are being done currently? How much are these stocks estimated?

- The Filizchay deposit, which is of strategic importance not only for Azerbaijan, but also for Europe, is included in the top-ten polymeric fields in the world. According to the current estimates, as a result of 27-year exploitation of the deposit and production of copper, silver, zinc and lead, the country will earn more than AZN 7 billion.

- What are the plans for the production of bullions and coins from Azerbaijani gold and silver? Are sales currently being made??

- Gold and silver coins and bullion produced by AzerGold, along with promotion of the Made in Azerbaijan brand, are a unique project for our independent country. Among the products in the market, only AzerGold offers 999.9 hallmark gold and silver. Our products, which have international quality certificates, are represented in about 10 jewelry stores. The gold and silver bullions depict the Heydar Aliyev Center, the patterns of the Karabakh Chelebi carpet and Gobustan rock paintings. In the future, they will have images of various historical events, architectural and historical monuments, examples of national art. I recall that in connection with the upcoming Summer European Youth Olympic Festival in Baku, upon the order of the Ministry of Youth and Sports, AzerGold produced 999.9 silver coins with the logo of the festival.

- We’d like to get information about the geological exploration work. In what areas are they currently being carried out? What has been done in this direction and what are your future plans?

- In order to increase the reserves of underground (sulfide) ores, in 2018 AzerGold CJSC carried out up to 17 thousand meters of drilling work at the Chovdar deposit in the Dashkasan region, Agyokhush section near the Chovdar deposit, which was discovered last year, the Tulallar gold-bearing site located in Goygol region, the gold-copper site "Ortakend-Khanaga" in the territory of Nakhchivan AR. At the same time, metallurgical, laboratory, geotechnical and hydrological studies were carried out, a document was prepared on a preliminary feasibility study at the Filizchay polymetallic deposit.

This year, it is planned to carry out 40 thousand meters of drilling work at the Filizchay, Agyokhush, Tullallar and Chovdar fields. Confirming the reserves of the Tulallar and Agyokhush deposits located near the Chovdar deposit will create conditions for the processing of ore from these deposits at the Chovdar ore processing site, which will further reduce the cost of production of precious metals AzerGold.

- How much do you think these stocks are estimated?

- AzerGold CJSC has been carrying out geological exploration since 2016. According to the outcomes of 2018, the reserves of non-ferrous and precious metals at the fields and sites used by AzerGold, were approved within the international standards of assessment. Compared with 2016, they increased 20-fold up to 4 million gold equivalent ounces. After the completion of the feasibility study for the underground (sulfide) phase of the Chovdar deposit, as well as the Agyokhush, Tullallar and Filizchay deposits, we will be able to more accurately estimate the increased reserves.