Increase in JORC Reserve at Gedabek (Replacement)

RNS Number : 0999Z

Anglo Asian Mining PLC

08 December 2014

 



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

8 December 2014

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

Increase in JORC Ore Reserve at Gedabek mine in Azerbaijan

(Replacement)

This announcement replaces the announcement that was made by the Company on 19 November 2014 at 7.00 am with RNS 3760X. The change relates to table 2 which summarises the ore reserve estimate at 1 September 2014 and in particular the proven in-situ copper grade (0.52 per cent., previously 0.61 per cent.), the amount of contained copper (totalling 102 thousand tonnes, previously 117 thousand tonnes) the amount of recovered copper (totalling 76 thousand tonnes, previously 68 thousand tonnes) and the amount of recovered silver (totalling 1.61 million ounces, previously 1.79 million ounces) in the ore reserves. In addition, the first and fourth bullet points have been amended as follows:

·    Total JORC ore reserve for the Gedabek open pit as of 1 September 2014 is 20.5 million tonnes of ore grading 1.03 grammes per tonne of gold (682 thousand ounces), 0.50 per cent. copper (102 thousand tonnes); and 7.35 grammes per tonne of silver (4.84 million ounces)

·    The contained copper in the ore reserve estimate has increased by 72 per cent. to 102 thousand tonnes and the recoverable copper increased by over 570 per cent. to 76 thousand tonnes compared to 11 thousand tonnes in the May 2012 ore reserve statement. This is a result of including ore with high copper grades that can be economically recovered by flotation.

All other details in the announcement remain the same. The full amended text is shown below.

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer, is pleased to announce a JORC compliant ore reserve statement for its Gedabek gold/copper/silver mine ("Gedabek") located in western Azerbaijan.  This ore reserve statement is based on the latest mineral resource estimate announced in June 2014 following the completion of an extensive drilling programme at Gedabek.

Overview   

·    Total JORC ore reserve for the Gedabek open pit as of 1 September 2014 is 20.5 million tonnes of ore grading 1.03 grammes per tonne of gold (682 thousand ounces), 0.50 per cent. copper (102 thousand tonnes); and 7.35 grammes per tonne of silver (4.84 million ounces)

·    The ore reserve estimate, when compared to the previous estimate of May 2012 (20.3 million tonnes at 1.14 grammes per tonne of gold, 9.46 grammes per tonne of silver and 0.29 per cent. copper), indicates an increase of approximately 3.9 million tonnes of ore, after allowing for mining depletion between 31 December 2011 and 1 September 2014

·    The ore reserve estimate is based on the latest resource statement of May 2014 of 61.8 million tonnes of ore grading 0.73 grammes per tonne of gold (1.45 million ounces), 0.23 per cent. copper (144 thousand tonnes); and 5.26 grammes per tonne of silver (10.46 million ounces) in the Measured and Indicated categories

·    The contained copper in the ore reserve estimate has increased by 72 per cent. to 102 thousand tonnes and the recoverable copper increased by over 570 per cent. to 76 thousand tonnes compared to 11 thousand tonnes in the May 2012 ore reserve statement. This is a result of including ore with high copper grades that can be economically recovered by flotation

·    The increase in recoverable copper is a result of the Company's evolving strategy to turn Gedabek into a poly-metallic mine by introducing a flotation plant to process sulphide ore with a high copper content which is currently being mined

·    The ore reserve estimate does not include an estimated 70 thousand ounces of gold, which is either stacked in leach pads, included in the Company's stockpiles or in circuit in the Company's agitated leach plant

Anglo Asian CEO Reza Vaziri said, "We are delighted to announce this ore reserve statement which shows an increase of approximately 3.9 million tonnes of ore, after allowing for depletion due to mining. Significantly, the high copper content reflected in this updated ore reserve statement reflects what we are seeing on the ground at Gedabek. With an increase of over 570 per cent. in recoverable copper by introducing flotation compared to the ore reserve statement in 2012, it is clear that Gedabek is suited to transition from a mine predominantly focused on gold production to a poly-metallic mine producing gold, copper and silver.

Whilst we are still focused on increasing the recovery of gold where we have 682 thousand ounces in the ore reserves, we are aiming to take advantage of the significant copper content we are seeing at Gedabek. Consequently, as previously announced, we are in the final stage of assessing the construction of a small scale flotation plant suited to process this type of ore to produce a copper and precious metals concentrate. I look forward to providing further updates with regards to this in due course."      

Further Information

CAE Mining was requested by Anglo Asian to estimate the ore reserves for the existing open pit operation of the Gedabek mineral deposit, located in western Azerbaijan. The resulting ore reserve report is based on the latest resource statement of May 2014 of 61.8 million tonnes of ore grading 0.73 grammes per tonne of gold (1,450,000 ounces), 0.23 per cent. copper (144,000 tonnes); and 5.26 grammes per tonne of silver (10,459,000 ounces) in the Measured and Indicated categories.

This latest resource estimate ("table 1") was based on previous exploration drilling campaigns (2006 to 2011), plus the most recent drilling campaign (2011 to 2013), which included an additional 99 holes to give a total of 394 drillholes to date, giving a total of 61,715 meters drilled and 27,623 samples taken to date.

Table 1: Resource Estimate for Gedabek, May 2014 (0.3 grammes per tonne gold cut-off grade)

Total Mineralisation	Tonnes	Gold (g/t)	Copper (%)	Silver  (g/t)
Measured	37,189,682	0.822	0.246	5.904
Indicated	24,606,093	0.591	0.213	4.298
Measured & Indicated	61,795,775	0.730	0.233	5.264
Inferred	9,444,918	0.967	0.135	4.739

It should be noted that the mineral resource statement includes an area to the west of the open pit Gedabek called Gadir.  This inferred resource will be mined by underground methods, and has been excluded when estimating the reserve base.

The ore reserve statement assumes a direct correlation between Proven and Probable, and Measured and Indicated, and excludes Inferred Resources. It is also assumed that all material types (oxide, sulphide and transition) can be processed through a combination of process routes that include the current heap leach and agitation leach plants and a potential future flotation plant.

A key difference between the resource and reserve estimate is that, unlike the resource estimate the reserve is not based on a fixed cut-off grade, instead the material is directed to the most appropriate processing method according to the net smelter return for the contained metals gold, copper and silver. For instance, for flotation, the break even cut-off is primarily dependent on the copper grade, and silver and gold are by-products in the concentrate.

Table 2: Ore reserve estimate as at 1 September 2014

Reserve Category	Ore Reserve
	In Situ	In Situ Grades			Contained metal			Recovered Metal
	(tonnes)	Au (g/t)	Cu (%)	Ag (g/t)	Au (oz)	Cu (t)	Ag (oz)	Au (oz)	Cu (t)	Ag (oz)
Proven	16,733,000	1.12	0.52	7.63	600,000	87,000	4,105,000	447,000	65,000	1,346,000
Probable	3,761,000	0.68	0.40	6.12	82,000	15,000	740,000	58,000	11,000	268,000
Total	20,494,000	1.03	0.50	7.35	682,000	102,000	4,845,000	505,000	76,000	1,614,000

In addition to the ore reserve of 20.5 million tonnes, there is also oxide/transition and sulphide material within the selected pit limit that is classified as Inferred in the geological model. This represents an additional Mineral Resource that can be investigated in the future with further drilling.

The technical information contained in this announcement and the ore reserves statement that relates to exploration results, mineral resources or ore reserves is based on information compiled by Dr Matthew Randall on behalf of CAE Mining. Dr Randall has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as a "qualified person" as defined in the Guidance Note for Mining, Oil And Gas Companies, June 2009, of the London Stock Exchange. Dr Randall has reviewed and approved the technical information contained in this announcement and consents to the inclusion of the ore reserves statement based on his information in the form and context in which it appears.

To view the full ore reserves statement prepared by CAE Mining please visit Anglo Asian's website www.angloasianmining.com and click on the Gedabek operations page.

**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]
Ewan Leggat	SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel: [phone]
Stuart Gledhill	SP Angel Corporate Finance LLP	Tel + 44 (0) 20 3463 2260
Felicity Winkles	St Brides Media & Finance Ltd	Tel: [phone]
Lottie Brocklehurst	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 square kilometre prospective exploration portfolio, assembled from analysis of historic Soviet geological data and held under a Production Sharing Agreement based on the Azeri oil industry.  The Company developed Azerbaijan's first operating gold/copper/silver mine, Gedabek, which commenced gold production in May 2009.  Gold production for the year ended 31 December 2013 from Gedabek totalled 52,068 ounces. The Company is also developing a second resource area, Gosha, which is 50 kilometres from Gedabek.  Gosha is being advanced with a view to developing a high grade underground gold mine. Due to the proximity of Gosha to Gedabek, gold ore produced at Gosha is processed at Anglo Asian's Gedabek plant.  In addition, Gedabek is a polymetalic deposit and its ore has a high copper content, and as a result the Company produces copper concentrate through its Sulphidisation, Acidification, Recycling, and Thickening plant. Furthermore, it is in the final stage of assessing the construction of a small scale, low capital expenditure flotation plant to produce a copper and precious metal concentrate. This will initially process ore from its existing stockpiles of sulphide ore having a high copper content.

Anglo Asian is also actively looking 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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