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Anglo Asian Mining (LON: AAZ) announced on Tuesday it has entered into a prepayment agreement with commodity trader Trafigura for its copper concentrate production. The deal is valued at $5 million.
Anglo Asian currently produces gold, silver and copper from the Gedabek operation and Gadir underground mine in Azerbaijan. Production from these mines last year totalled 31,821 gold equivalent ounces, including 2,516 tonnes of copper in concentrates.
Under the agreement with Trafigura, Anglo’s Azerbaijan-based subsidiary will receive $3 million immediately and a further $2 million upon resumption of flotation processing. The advance payments will be settled by delivering copper concentrates to Trafigura.
Trafigura will have the exclusive right to purchase 50% of the first year of future production from the Demirli deposit, which is estimated to contain 275,000 tonnes of copper and 3,200 tonnes of molybdenum.
“We are extremely pleased with a prepayment agreement for our sales of copper concentrate with Trafigura in return for exclusivity over part of the future production from the Demirli mine. This provides another source of financing for the company and again demonstrates our strong relationships with our business partners,” Anglo Asian CEO Reza Vaziri said in a news release.
The agreement is valid until December 31, 2024, by which time Anglo expects sufficient concentrate will have been delivered to Trafigura to settle the advance payments.
