Reserve Report Gedabek Gold Mine Azerbaijan

RNS Number : 8471E

Anglo Asian Mining PLC

07 June 2012

 



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

7 June 2012

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

Maiden JORC Ore Reserve Statement at Gedabek of 744,038 ounces of gold

Anglo Asian Mining plc, the AIM listed gold producer, announces a JORC-compliant Ore Reserve statement at its Gedabek gold/copper/silver mine ('Gedabek') located in the Republic of Azerbaijan.

 Overview

·    Total mineable Reserve of 20,312,879 tonnes at 1.139 g/t gold for 744,038 ounces, 0.293% copper for 59,479 tonnes, and 9.456 g/t silver for 6,175,531 ounces as at 30 December 2011

·    Reserve report represents a significant increase from the Company's internal estimate of 311,000 ounces of recoverable gold over a six year mine life announced in 2007 prior to the construction of Gedabek mine

·    Ore Reserve has been derived from the estimated total Mineral Resource which stands at 37.1 million tonnes at 0.884 g/t gold for 1,054,382 ounces; 0.220% of copper for 81,765 tonnes; and 7.215 g/t of silver for 8,608,551 ounces in the Measured and Indicated categories

·    Proved and Probable Ore Reserve for product once mined, processed and marketed totals 532,607 ounces of gold, 11,305 tonnes of copper and 1,711,075 ounces of silver as at 1 January 2012

·    532,607 ounces of recoverable gold to be processed through existing heap leaching operation, through agitation leaching by H2 2013 and potentially flotation later in Gedabek's mine life for best gold recovery rates

·    Reserve report does not include estimated 90,000 ounces of gold that is currently either stacked on the leach pad or unrecovered ore from the heap leach process

Anglo Asian CEO Reza Vaziri said, "We are delighted to announce this ore reserve report which has significantly exceeded our previous internal estimate of recoverable ounces of gold at Gedabek and in turn has increased the life of mine.  Importantly, in addition to the 532,607 ounces of recoverable gold at Gedabek we have an estimated 90,000 ounces of gold which is currently stacked on the leach pad or in unrecovered ore from the heap leach process, which will also be processed.  Whilst we have been utilising a heap leach operation to recover gold since our first gold pour in 2009, we are committed to building an agitation leaching plant, which we believe will significantly improve gold recovery rates at the mine and therefore improve the life of mine and economic fundamentals of Gedabek.

"An extensive 24,567 m drilling programme is also underway targeting the extension of the existing mine at Gedabek with the aim of further increasing the mineral reserves and resources, which currently stand at over 1 million ounces of gold in the Measured and Indicated categories, of the Gedabek deposit as part of our ongoing exploration and development programme. We look forward to reporting on this in due course."

Further Information

CAE Mining International Ltd was requested by the Company to update the Ore Reserves estimation of the Gedabek Mineral Deposit. This update was based on the recent JORC compliant Measured and Indicated mineral resources estimation at Gedabek of 37,111,577 tonnes at 0.884 g/t of gold for 1,054,382 ounces; 0.220% of copper for 81,765 tonnes; and 7.215 g/t of silver for 8,608,551 oz, which was completed by CAE Mining International Ltd. earlier in the year (see press release 3 April 2012).  The ultimate optimal open pit Ore Reserves was estimated by applying the Lerchs-Grossman open pit optimisation algorithm and taking into consideration an extensive sensitivity analysis of several technical and economic corporate scenarios. 

The updated Ore Reserves estimation considered the following mineral processing options for the extraction of gold, copper and silver from the mineral resource: heap leaching for oxide mineralisation at 0.3 ≤ Au g/t < 1.0; agitation leaching for oxide mineralisation at 1.0 ≤ Au g/t < ∞ and sulphide mineralisation at 1.0 ≤ Au g/t < ∞; and flotation for sulphide mineralisation at 0.3 ≤ Au g/t < 1.0.

The updated open pit Ore Reserves estimation of the oxide and sulphide mineralisation of the Gedabek Mineral Deposit was based on a cut-off grade of 0.3 g/t of gold.  In addition, the updated ore reserves were constrained with the open pit surface topography dated on 30 December 2011.

The updated Proved and Probable ore reserves estimations are described in the table below.

	Tonnage	Grades			Products			Recovered Products
	Ore T	Au g/t	Cu %	Ag g/t	Au Oz	Cu t	Ag Oz	Au Oz	Cu t	Ag Oz
Proved ore reserves	15,586,952	1.172	0.285	9.203	587,099	44,389	4,611,806	410,623	8,560	1,089,474
Probable Ore Reserves	4,725,928	1.033	0.319	10.292	156,939	15,091	1,563,725	121,984	2,745	621,601
Proved and Probable Ore Reserves	20,312,879	1.139	0.293	9.456	744,038	59,479	6,175,531	532,607	11,305	1,711,075

The ore will be recovered through a combination of the existing heap leaching operation at Gedabek, an agitation leaching plant which is being constructed with the target of being brought in to operation by H2 2013 (see announcement of 10 May 2012) and a flotation plant which the Company plans to construct later in the life of the mine.

It must also be noted that the total Ore Reserve statement accounts for ore in the ground at 30 December 2011 and does not account for ore that has already been mined, which is currently stacked on the leach pads. The ore on the leach pads still contains circa 90,000 ounces of gold which the Company will either recover through the on-going heap leaching process or by reprocessing the spent heaps through the agitation leaching plant once it is completed.

The technical information contained in this announcement and the Updated Ore Reserves Report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Guillermo Turner-Saad of CAE Mining International Ltd. Mr Turner-Saad is a Fellow of The Australasian Institute of Mining and Metallurgy and he 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 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and a 'qualified person' as defined in the Guidance Note for Mining, Oil and Gas Companies, June 2009, of the London Stock Exchange. Mr Turner-Saad has reviewed and approved the technical information contained in this announcement and consents to the inclusion in the Updated Ore Reserves Report of the matters based on his information in the form and context in which it appears. 

To view the full Ore Reserves Report prepared by CAE Mining International Ltd 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]
Andrew Herbert	Anglo Asian Mining plc	Tel: [phone]
Ewan Leggat	Fairfax I.S. PLC	Tel: [phone]
Laura Littley	Fairfax I.S. PLC	Tel: [phone]
Felicity Edwards	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 2011 totalled 57,068 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.

 

END

 

 

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