Gedabek Gold/Copper Mine and Gosha Update

RNS Number : 4792I

Anglo Asian Mining PLC

15 June 2011

 



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

15 June 2011

Anglo Asian Mining plc ('Anglo Asian' or 'the Company')

Gedabek Gold/Copper Mine and Gosha Contract Area Update

Anglo Asian Mining plc, the AIM listed gold producer, provides an update on exploration and development activities at its flagship Gedabek gold/copper mine ('Gedabek') and 300 sq km Gosha Contract Area ('Gosha') in Azerbaijan.

Overview

·    Defined exploration programme in place aimed at increasing Gedabek's resource, proving reserves and extending the life of mine - new JORC compliant reserve report expected to be available by H1 2012

·    Completed 2010 infill drilling programme at Gedabek including 61 drill holes over 6,000m - 45 bore hole assays received and remaining assays anticipated July 2011

·    Advanced Phase 2 of resource development programme at Gedabek - 30 drill holes over 6,000m completed of the planned 17,500m of drilling

·    Appointed mining consultants to conduct a feasibility study for new agitation leaching plant at Gedabek to improve total gold recovery and increase life of mine

·    Progressed Development and Production Programme at Gosha - due to be submitted to the Government of Azerbaijan in October 2011, with plan to develop a small gold mine commencing production 2H 2012

Anglo Asian CEO Reza Vaziri said, "Developing Gedabek's production and processing profile remains a key focus for Anglo Asian.  We are therefore delighted to have advanced our Phase 2 resource development programme, which includes a 17,500m drilling programme and hope to issue a new JORC compliant reserve report at Gedebek by the first half of 2012.  We are also pleased to have appointed mining consultants Arcardis Chile to undertake a feasibility study to build a new agitation leaching plant, which would, we believe, improve total gold recovery rates and increase the life of mine, currently standing at 300,000 ounces of gold over a six year period. 

 "We are also committed to increasing Anglo Asian's production profile through additional exploration programmes across our portfolio of prospective copper and gold assets in Azerbaijan.  At Gosha we have initiated a development and production programme to be submitted to the Government of Azerbaijan in October 2011 with the mid-term intention to develop a small gold mine with production by the second half of 2012."

Gedabek

At Gedabek, the Company has implemented a defined exploration strategy aimed at increasing its resource, proving reserves and extending its life of mine, which currently stands at six years with a targeted production in excess of 300,000 oz of gold.  Anglo Asian's current JORC compliant resource, measured at June 2010, stands at 791,000 oz of gold, 49,300 tonnes of copper and 7,597,000 oz of silver at cut-off grade of 0.3 g/t gold for all categories.

Results from the 61 hole 6,000m infill drilling conducted in 2010, which concentrated within the boundaries of the existing pit to increase the confidence in the resource of the Gedabek mine, are expected in July 2011.   

Phase 2 of the resource development programme is now underway.  To date, 30 drill holes over 6,000m have been completed under the 17,500m drilling programme, which is primarily concentrating on exploration of the existing pit boundaries and target areas in close proximity to the mine such as Choplan and Maarif.  This programme has been divided as follows:

·        7,500m to be drilled in an area that borders the existing mine and will concentrate on an area underground at a depth of 200 to 350 metres - 5,000m completed to date;

·        7,000m of drilling at Maarif and other areas in the Gedabek Contract Area - 1,000m completed to date; and

·        3,000m of drilling at Cholpan, a highly prospective area in close proximity to the existing mine.

In terms of Gedabek's mine development, the Company has entered an agreement with mining consultants Arcardis Chile with regards to undertaking a feasibility study to build a new agitation leaching plant   This plant would process high grade ore and additional resources that are not suitable for heap leaching, thereby improving total gold recovery rates at Gedabek.  Agitation leaching recovery rates for mineral extraction are typically measured at over 90% compared to circa 70% usually recorded in heap leaching.  Additionally, residual gold in high grade ore that has been processed by heap leaching and left on the heap leach pad during 2009 through to the end of 2011 could be processed through agitation leaching, again improving total mineral extraction from Gedabek's orebody.   

The Company expects the feasibility study to be completed by October 2011 and a new JORC compliant reserve report to be available by early 2012.

On completion of the feasibility study to construct an agitation leaching plant and a review of the financing options, a decision as to whether to build the plant will be made.

Gosha 

As previously announced, the Company submitted a Notice of Discovery to the Government of Azerbaijan in February 2011 following active exploration in 2010.  This included 3,000m of drilling and 300m of adit and sampling work.  According to the terms of the Product Sharing Agreement ('PSA'), Anglo Asian has to submit a Development and Production Programme to the Government of Azerbaijan for approval.  The Development and Production Programme is now underway and is expected to be finalised in October 2011.  It is the Company's intention to develop a small gold mine with production by 2H 2012.

Under the PSA, the Government of Azerbaijan would receive 12.75% of any gold produced at Gosha until Anglo Asian has recovered its capital, operating and financing costs in full at which point the Government of Azerbaijan is then entitled to a 51% share of profit.  It should be noted that costs incurred on Gosha can only be recovered from revenue generated from the Gosha Contract Area.   

**ENDS**

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

Reza Vaziri	Anglo Asian Mining plc	Tel: [phone]
Andrew Herbert	Anglo Asian Mining plc	Tel: [phone]
John Harrison	Numis Securities Limited, as Nominated Adviser	Tel: [phone]
James Black	Numis Securities Limited, as Corporate Broker	Tel: [phone]
Felicity Edwards	St Brides Media & Finance Ltd	Tel: [phone]
Hugo de Salis	St Brides Media & Finance Ltd	Tel: [phone]

Notes:

Anglo Asian Mining plc (AIM:AAZ) is a gold producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan.  The Company has a 1,962 sq km prospective exploration portfolio, assembled on the back of analysis of historic Soviet geological data and held under a Production Sharing Agreement ('PSA') based on the Azeri oil industry.  The Company developed Azerbaijan's first operating gold/copper mine, Gedabek, which commenced gold production in May 2009.  Gold production for the year ended 31 December 2010 totalled 67,267 oz of gold.

Anglo Asian is actively looking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for other properties in Central Asia and Caucasia in order to fulfil its expansion ambitions and become a mid-tier gold and base metal production company focussed in these regions.

 

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