Exploration and Development Activity Update

RNS Number : 6294U

Anglo Asian Mining PLC

26 October 2017

 

Anglo Asian Mining plc / Ticker: AAZ / Index: AIM / Sector: Mining

26 October 2017

Anglo Asian Mining plc

Exploration and Development Activity Update  

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to announce an exploration and development update for its Gedabek gold, copper and silver licence area ("Gedabek") in western Azerbaijan, which includes its new open pit gold mine, "Ugur", the Gedabek open pit mine and the Gadir underground mine ("Gadir"), in addition to the Company's Ordubad contract licence area, located in the Nakhichevan exclave of Azerbaijan.

Highlights

·    Exploration underway at newly producing Ugur open pit mine with the objective of defining extensions of similar mineralisation to increase resource inventory

·    On-going drilling programme at Gedabek open pit to evaluate and optimise the mine plan ahead of recommencement of mining activities in Q1 2018

·    Recommencement of Gadir underground mine following temporary pause in mining ore since February 2017 to enable development and exploration drilling:

o Drilling has confirmed that Gadir can recommence production in Q4 2017

o Continuity of mineralisation demonstrated following evaluation of further down dip potential

o First phase of the tunnel between Gadir and Gedabek underground mineralisation completed with Gedabek style mineralisation intersected - tunnel extension to continue into 2018

·    Low-cost exploration work successfully completed at Ordubad contract licence with encouraging initial results confirming presence of surface and underground gold and copper mineralisation

·    Gedabek tailings dam wall raise to support planned expansion now underway - wall is being raised to provide additional six metres of vertical capacity in first phase and a further six metres in second phase - scheduled for completion by the end of 2017 

Anglo Asian CEO Reza Vaziri commented: "We have been extremely busy on the ground in Azerbaijan in regards to exploration. We recently reported increased production for quarter three of 2017 with the commencement of mining at Ugur. Having spent time in 2017 optimising the extraction of gold and gold-copper ores from the Gedabek open pit, we now look forward to recommencing mining to contribute to production in the first quarter of 2018 with the enhanced knowledge of the mineralisation that these exploration activities will provide. We are also increasing the capacity of our tailings dam to support the expansion."

Further Information

Ugur Open Pit Mine

Quarter three of 2017 proved to be a significant milestone for Anglo Asian with the commencement of open pit mining of the Ugur gold deposit following completion of the JORC mineral resource and ore reserve statements.  Work at Ugur in Q3 2017 focused on finalising the geological work for mine planning and project construction. The geological team is now assessing the surrounding area for extensions of the Ugur type of mineralisation, and has taken 295 geochemical samples from surface. Due to the geological activities to bring the Ugur deposit to reserve level with expanded drill core and reverse circulation chip logging and sampling, work on this deposit has utilised most of the resources of the Company's exploration geological team in 2017.

Gedabek Open Pit

Certain mining operations have been temporarily suspended to enable development exploration, optimisation and redeployment of equipment to other tasks.  Mining in the Gedabek open pit was suspended in Q3 2017 to allow for continuation of the drilling programme to evaluate and optimise the extraction of the gold and gold-copper ores.  Some of the heavy earthmoving equipment has been redeployed for transporting stockpiled ore for production, construction and implementation of the new open pit mine at Ugur, and raising the tailings dam wall.  Reverse circulation ("RC") and core drilling ("DD") is ongoing at the Gedabek open pit.  As at the end of Q3 2017, 31 RC drill-holes with a total of 2,978 metres and 34 DD drill-holes with a total of 1,792 metres were completed.  Another 5,000 metres of drilling is planned for Q4 2017.

Gadir Underground Mine

As previously announced, ore production was temporarily stopped from the Gadir underground mine in February 2017 to allow development and exploration drilling.  Production from Gadir recommenced in September 2017.  Underground development and exploration activity until end Q3 2017 included 2,712 metres of tunnelling that comprised spiral ramp development for production preparation, exploration tunnels at Gadir, and an underground tunnel from Gadir to the deep mineralisation at the northern end below the Gedabek open pit.  Drilling activity for ore extraction planning comprised 48 DD drill-holes with a total of 1,311 metres of BQ diameter, 36 DD drill-holes (HQ/NQ size core) with a total of 2,268 metres completed.  2,711 metres of sidewall has been geologically mapped.  This work confirms that Gadir can recommence production in Q4 2017 and has provided over 3,250 assays.

Regarding surface extension drilling of the Gadir mine to evaluate further down dip potential, nine core drill-holes totalling 4,007 metres were completed. 2,150 samples have been assayed which has provided results that demonstrate continuity of mineralisation.

To complete the first phase of the tunnel between Gadir and the Gedabek underground mineralisation, some 600 metres of tunnelling has been completed that intersected Gedabek style mineralisation at the end of the tunnel drive. It is further planned to extend this tunnel along the Gedabek mineralisation beneath the backwall of the open pit and to fan drill to assess the mining potential for a Gedabek underground mine. This exploration work is planned for 2018 as underground mining equipment is now being utilised to mine ore at Gadir. The mineralisation target is additional to the current Gedabek open pit reserves.

Other Exploration

Within the Gedabek contract area, reconnaissance sampling of surface outcrop has provided 34 samples with positive results for gold and copper mineralisation at the "Soyudlu" area, some two kilometres from the tailings dam facility. Follow-up geological mapping, alteration mapping and area definition for drilling is planned. This area was initially investigated as part of the planning to situate future expansion of the tailings dam.

Due to the work required to bring Ugur into production, activity at Bittibulag was suspended during 2017. Geological manpower was diverted from Bittibulag to Ugur because Ugur is closer to the Company's processing facilities and the geological uncertainty at Bittibulag. Initial drilling in 2016 did confirm the presence of mineralisation and surface geochemical sampling confirmed an alteration area. However, the continuity of mineralisation was not clearly defined due to structural deformation. It is planned in 2018 to further investigate Bittibulag with geophysical methods to determine the geometry and extent of mineralisation to focus future drilling.

The Gedabek contract area hosts many targets of different styles of mineralisation, which are being assessed in order to prioritise future exploration programmes. It is planned to prepare an annual three year work programme to dovetail into the Company's gold and copper production profile. This demonstrates the geological opportunities available to the Company for further evaluation. Further information regarding exploration programmes during 2018 and beyond will be announced by the end of Q4 2017.

Low cost exploration work also continued at the Ordubad contract licence area in the Nakhchivan region of Azerbaijan.  During Q3 2017, 750 metres of road cleaning was completed to reach exploration adits and surface mineralisation at the Shakadara deposit in order to verify the presence of mineralisation as reported in Soviet reports. 604 linear metres of trenching was completed from which 441 samples were collected. Initial results confirm the presence of surface and underground mineralisation of both gold and copper. It is planned to test similar style surface gold-quartz mineralisation at the adjacent Keleki area. On confirmation of this gold mineralisation, the Company will decide on a strategy to fully assess these deposits along with the Piazbashi and Agyurt deposit in the Ordubad area.

Tailings dam

To support the planned expansion resulting from the exploration activities and other production increases as a result of the strategic review earlier in 2017, the Company is also increasing the capacity of its tailings dam to meet future requirements. The work required consists of raising the existing tailings dam wall using rock that is mined and hauled to the tailings dam. This work is being carried out in two phases which in total will raise the wall by an additional 12 metres. The volume of rock required of phase I (a raise of 6 metres) is approximately 700,000 cubic metres. This work is scheduled for completion in Q4 2017, after which time the equipment currently being used will be redeployed to Ugur mining activity, run-of-mine pad and stockpile management and preparation of works to re-commence mining activities to the Gedabek open pit. Work is also underway constructing a second pipeline between the tailings dam and the Company's processing facilities to facilitate planned expansion of the processing facilities.  

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

*ENDS**

For further information please visit www.angloasianmining.com or contact:

Reza Vaziri	Anglo Asian Mining plc	Tel: [phone]
Bill Morgan	Anglo Asian Mining plc	Tel: [phone]
Stephen Westhead	Anglo Asian Mining plc	Tel: [phone]
Ewan Leggat	SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel: [phone]
Soltan Tagiev	SP Angel Corporate Finance LLP	Tel + 44 (0) 20 3470 0470
Susie Geliher	St Brides Partners Ltd	Tel: [phone]
Lottie Wadham	St Brides Partners Ltd	Tel: [phone]

Notes:

Anglo Asian Mining plc (AIM:AAZ) is a gold, copper and silver producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan.  The Company has a 1,962 square kilometre portfolio, assembled from analysis of historic Soviet geological data and held under a Production Sharing Agreement modelled on the Azeri oil industry.

The Company developed Azerbaijan's first operating gold/copper/silver mine, Gedabek, which commenced gold production in May 2009.  Gedabek is an open cast mine with a series of interconnected pits. The Company also operates the high grade Gadir underground mine which is co-located at the Gedabek site. The Company has a second underground mine, Gosha, which is 50 kilometres from Gedabek. Ore mined at Gosha is processed at Anglo Asian's Gedabek plant. The Company has also started production in September 2017 from its Ugur open pit mine, a recently discovered gold ore deposit at Gedabek.

Gold production for the year ended 31 December 2016 from Gedabek totalled 65,394 ounces with 1,941 tonnes of copper also produced.  Gedabek is a polymetallic deposit and its ore has a high copper content, and as a result the Company produces copper concentrate from its Sulphidisation, Acidification, Recycling, and Thickening (SART) plant. Anglo Asian also produces a copper and precious metal concentrate from its flotation plant, which is processing tailings from the agitation leach plant.

Anglo Asian is also actively seeking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for other properties in order to fulfil its expansion ambitions and become a mid-tier gold and copper metal production company.

 

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