Gedabek Gold Resource Update

RNS Number : 2186V

Anglo Asian Mining PLC

29 October 2010

 



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

29 October 2010

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

Gedabek Resource increases to 704,000 oz Au in the Measured and Indicated classifications

Anglo Asian Mining plc, the AIM quoted gold producer, announces that following the issue of a new resource report, the gold resource at its Gedabek gold/copper mine in Azerbaijan ('Gedabek') has increased to 704,000 ounces ('oz') of gold ('Au') in the Measured and Indicated classifications. 

The JORC compliant block model estimate ('the Report') has been produced by mining consultants SGS Canada Incorporated Geostat Group ('SGS') on behalf of Anglo Asian and includes updated information available as of 7 June 2010.  The Report significantly increases the resource from the estimate prepared in 2006 by SRK ('the SRK Estimate').  Both the Report and the SRK Estimate employ a cut-off grade of 0.3g/t Au for all categories.  Newly available structural geologic information has been incorporated into the geologic model on which the Report was based.  The resource estimate in the Report explicitly excludes mined materials, including ore mined in the period to 7 June 2010 and that which is currently in the leach pad process, or contained in ore stock piles.

Anglo Asian CEO Reza Vaziri said, "We are delighted to announce this upgraded resource which, after taking account of ore already mined, gives a total gold uplift across the Measured and Indicated resource categories of 31.2%.  This resource increase reaffirms the inherent value of the Gedabek mine and, combined with the increasing gold production figures we are seeing at the mine and the favourable gold price environment will further strengthen our position as a profitable and cash generative gold production company."

Comparison of SGS 2010 Report and SRK 2006 resource estimate

SGS Canada 2010 Gedabek Resource (production era)
	Tonnes	Au	Ag	Cu	Au	Ag	Cu
Classification	million	g/t	g/t	%	oz '000	oz '000	Tonnes
Measured	6.4	1.70	16.1	0.28	351	3,328	17,900
Indicated	9.8	1.12	11.1	0.27	353	3,487	26,200
Meas + Ind	16.2	1.35	13.1	0.27	704	6,814	44,100
Inferred	2.5	1.09	9.7	0.21	87	783	5,200
SRK 2006 Gedabek Resource (pre production)
	Tonnes	Au	Ag	Cu	Au	Ag	Cu
Classification	millions	g/t	g/t	%	oz '000	oz '000	Tonnes
Indicated	12.4	1.5	13.0	0.26	598	5,183	32,200
Inferred	3.2	1.0	9.1	0.16	103	936	5,100

Numbers in tables above calculated with greater precision than displayed, then rounded.

A total of 3,252 holes have been drilled and the results incorporated into the Report: 3,076 air-rotary production holes; 59 diamond drill holes ('DDH'); 36 reverse circulation holes ('RC'); and 81 combination holes which started with RC, drilled proximal to the expected mineralised zone, and finished with DDH.  A total of 13,895 assays were utilised.

Further Information

The updated resource estimate was prepared by SGS using inverse-distance squared estimation on 2.5x10x10 metre blocks.  A geologic grade-shell constructed at 0.2g/t Au was used to constrain the estimation of the grades; the grade shell was designed on 20 sections paralleling the drillhole fences and 10 longitudinal orthogonal sections.  Structural geology and continuity of gold grades were primary design factors in the grade shell design.  Subsequently, four mineralised zones were identified, two of which were subdivided into two subzones each (in total six sub-zones).  Search ellipsoids were constructed for grade estimation for each of the sub-zones.  A nearest-neighbour estimate was also completed for validation purpose, using the same grade shell and search ellipsoids.

Gold grades were capped at 30g/t to limit the influence of sporadic high-grade assays, and thirty assays were thus capped.

The Block Model Estimate was classified to the standard three JORC classes: Measured/Indicated/Inferred on the following criteria:

·    Measured - within a radius of 15 metres from a composite value.

·    Indicated - between radii of 15 and 35 metres from a composite value.

·    Inferred - beyond the radius of 35 metres from a composite value, and up to the limits of the grade-shell envelope.

A value of 2.65 was used for specific gravity, derived from cumulative histogram analysis of 228 samples, with a mathematical average at 2.68.

The information within this resource update has been reviewed and signed off by D. Cukor, P.Geo, Senior Geologist of SGS, and Competent Person under JORC guidelines.  The Report is available to be viewed at http://www.aamining.com/downloads.php.

This updated resource estimate follows the press release of 13 April 2010 in which the initial results of 'Phase 1 - Realistic Mineral Resources Model' (the 'Phase 1 Executive Summary') produced by SGS on behalf of the Company were announced.  This earlier estimate was based on a total of 544 drill holes and the results were incorporated into the Phase 1  Executive Summary: 262 air-rotary production holes; 29 DDH; 34 RC holes; and 78 combination holes, started with RC, drilled proximal to the expected mineralised zone, and finished with DDH.  The Phase 1 Executive Summary (not a JORC-compliant report) also indicated significant increases in the overall quantities of gold, silver and copper.  However, like the SRK Estimate, the Phase 1 Executive Summary, produced by SGS, did not include structural geologic information, or the additional drill hole data (2,708 drill holes), which became available from 7 June 2010.  The inclusion of this information has significantly improved the interpretation of the geologic model.

**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 an emerging 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. 

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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