AzerGold CJSC hosted the first meeting of the new Steering Committee on Production Sharing Agreement

The first meeting of the Steering Committee was held on the Exploration, Development and Production Sharing Agreement between AzerGold CJSC and R.V. Investment Group Services LLC on the prospective gold, copper and polymetallic ore deposits of Gadabey, Gosha, Kharkhar, Garadagh, Ordubad group (Piyazbashi, Aghyurd, Shakardara, Kalaki), Gizilbulag, Damirli and Vejnali.

Khayyam Farzaliyev, the new Chairman of the Steering Committee, Deputy Chairman of the Executive Board of AzerGold CJSC, led the meeting, which discussed the realized activities after the transfer of partnership authorities to AzerGold CJSC under the Agreement. The operations by the Azerbaijan International Mining Company Ltd. – operator of the foreign company’s mining projects – during the first half of 2024, were reviewed, including the activities carried out for operating the Damirli copper-molybdenum deposit in Aghdara region.

It was reported that in the first half of 2024, the production and sales of the foreign company decreased seriously, and it was lower than the planned volume. During the first six months of 2024, 4 704 ounces of gold, 100 tons of copper, and 12 745 ounces of silver were produced. According to the production plan for six months, these indicators show a decrease of 38 percent for gold, 89 percent for copper, and 64 percent for silver. Consequently, planned revenues for the overall project decreased by 54 percent. The reason for these decreases was the suspension of production since July of 2023 in Soyudlu village of Gadabey region for the purpose of monitoring and evaluation of the situation at the wet tailings facility.

After AzerGold CJSC has been assigned to represent the country for agreement performance by 21 June 2024 dated, No. 1176-VIQ Law of the Republic of Azerbaijan, the production process is to be gradually restored based on supportive events together with the foreign company, including adaptation of construction and installation works, as well as other activities to local and international legislation. Hence, the production indicators of the partner company will be increased, and at early 2025, they will reach the level observed in 2023. And AzerGold CJSC will continue to support the partner company to achieve this growth rate.

During the meeting, preparation for the production and export plan for the next year were discussed, as well as the new members of the Steering Committee groups on economic, production and technical, as well as environmental issues were determined. And also, support-requiring issues of mutual interest, as well as the necessary measures for the sooner operation of the Damirli copper-molybdenum deposit were considered, and the realization of the discussed issues according to the Agreement and relevant legislation were included in the final protocol of the meeting.

The Steering Committee managing the project on the Production Sharing Agreement consists of AzerGold CJSC, the Ministry of Economy, the Ministry of Ecology and Natural Resources and the authoritative members of R.V. Investment Group Services LLC.

The Production Sharing Agreement was signed on August 20, 1997 between Azergizil State Company of the Republic of Azerbaijan and R.V. Investment Group Services LLC. From January 22, 2000 until the amendment to the Agreement, the Ministry of Ecology and Natural Resources has been considered the legal successor of Azergizil after its litigation for the obligations arising from the Agreement. According to the No. 1176-VIQ Law of the Republic of Azerbaijan dated 21 June 2024, the authority to represent the state in connection with the implementation of the Agreement was assigned to AzerGold CJSC.