Anglo Asian agrees loan as output falls below forecast

The loan is to provide working capital.

The company produced and refined 1,562 ounces of gold and sold 1,332 oz Au during September and produced 2,875 oz Au and sold 2,508 oz Au during October 2009.

Production was below management expectations due to difficulties encountered installing two new cone crushers and continued issues with the stacker that subsequently affected levels of ore on the leach pad.

These difficulties were principally the result of unexpectedly high moisture content within the ore fed to the crushers.

The company is confident that, having identified this issue, the new stacker and crusher plant facilities will enable more efficient operation of the plant in future.

Anglo Asian anticipates producing 2,030 oz Au and selling 1,770 oz Au for the month ending 30 November, which is broadly inline with management expectations.

As a result, the Board is now forecasting the Gedabek mine in Azerbaijan to produce 25,000 oz Au in its first full year of production to June 2010, the company's first gold sales having been made in July 2009.

This is below the company's previous forecast of 50,000 oz Au.

New initiatives to improve the processing plant's performance have and are being implemented, which the board anticipates will increase the plant's running rate to an annualised 50,000 oz Au with effect from March 2010.