Ugur Gold Deposit - JORC Resource and Reserves

RNS Number : 8283N

Anglo Asian Mining PLC

14 August 2017

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

14 August 2017

Anglo Asian Mining plc

Ugur Gold Deposit - JORC Mineral Resource and Reserves

Anglo Asian Mining plc ("Anglo Asian" or "the Company"), the AIM listed gold, copper and silver producer, is pleased to announce the Mineral Resource and Mineral Reserves estimated in accordance with the JORC (2012) code for the Ugur gold deposit ("Ugur") located at the Company's Gedabek licence area ("Gedabek") in Western Azerbaijan. The resource estimate, which has exceeded the Company's initial expectations, will provide significant upside to the current production from Gedabek. Ugur is on track to commence production in September 2017.

Ugur JORC (2012) Mineral Resource and Reserves

· Total Mineral Resource of 199,000 ounces of gold and 1,049,000 ounces of silver

· Measured plus Indicated Mineral Resource of 172,000 ounces of gold and 884,000 ounces of silver

· Proven plus Probable Reserves of 147,000 ounces of gold and 808,000 ounces of silver

Development Update

· Road between the Ugur deposit and the Company's processing facilities is complete

· Top soil pre-strip and storage commenced late July 2017

· Condemnation drilling completed for final siting of surface infrastructure

· Mining and haulage of ore to the processing facility stockpile planned to commence before end August 2017

· Commencement of processing ahead of schedule with first production planned in September 2017

Anglo Asian CEO, Reza Vaziri, said "I am very pleased that the JORC total mineral resource estimate for Ugur of 199,000 ounces of gold is in excess of our initial estimates of 195,000. This mineral resource is a valuable addition to our mineral resources at Gedabek. The mineral reserves of 147,000 ounces of gold, or over 70 per cent. of the total mineral resource, is also highly encouraging. Development work is continuing well and I look forward to reporting the first production of gold from the Ugur deposit which is targeted for next month."

Anglo Asian Group Director of Geology & Mining, Stephen Westhead, said "The anticipated commencement of mining and processing of Ugur ores in September 2017 represents a significant step in the development programme of Gedabek. This is an excellent achievement given that the first exploration drill hole at Ugur was only completed in September 2016. It demonstrates the ability of Anglo Asian to leverage its adaptable on-site processing facilities with Gedabek's significant exploration potential. The completion of the Ugur JORC resource and reserves estimates forms part of the development strategy of the resource base for the deposits and exploration assets of Gedabek."

Background to the Ugur deposit

Anglo Asian's in-house exploration team defined a new mineral occurrence in 2016 named "Ugur" (meaning "good luck" or "success" in the Azeri language) from geological mapping and surface sampling methods. Ugur is located three kilometres north-west from the Company's processing facilities at Gedabek. Since the discovery of Ugur, the Company has extensively explored the deposit to define its resource and reserves.

The deposit comprises an oxide gold-rich zone to a depth varying between 50 to 60 metres. The area covered by this drilling and proposed open pit outline is 350 metres (east-north-east) by 250 metres (north-north-west).

JORC (2012) Mineral Resources and Ore Reserves Statements

The mineral resource and reserves are prepared in accordance with JORC (2012), which is the current edition of the JORC Code. After a transition period, the 2012 edition came into mandatory operation from 1 December 2013.

Mineral Resource

Mineral Resource	Tonnage (millions)	Gold Grade (g/t)	Silver Grade (g/t)	Gold (ounces)	Silver (ounces)*
Measured	4.12	1.2	6.3	164,000	841,000
Indicated	0.34	0.8	3.9	8,000	44,000
Measure and Indicated	4.46	1.2	6.2	172,000	884,000
Inferred	2.50	0.3	2.1	27,000	165,000
Total	6.96	0.9	4.7	199,000	1,049,000

* does not add due to rounding.

Mineral Reserves

Mineral Reserves	Tonnage (millions)	Gold Grade (g/t)	Silver Grade (g/t)	Gold (ounces)	Silver (ounces)
Proved	3.37	1.3	7.2	142,000	779,000
Probable	0.22	0.8	4.1	5,000	29,000
Proved and probable	3.59	1.3	7.0	147,000	808,000

The Proved and Probable Ore Reserves estimate is based on that portion of the Measured and Indicated Mineral Resource of the deposit within the scheduled mine designs that may be economically extracted, considering all "Modifying Factors" in accordance with the JORC (2012) Code.

Mineral Resource and Ore Reserve Estimation

Anglo Asian, together with the mining and geological consulting group Datamine International ("Datamine"), prepared the JORC (2012) resource and reserves estimation of the Ugur deposit. This was following the completion of 55 "phase one" reverse circulation ("RC") drill holes totalling 1,842 metres, 50 core drill holes totalling 6,355 metres, and 33 infill RC drill holes totalling 2,766 metres that supplemented initial surface outcrop and channel sampling. The detailed mineral resource and reserves estimates are set out in Appendix 1. A glossary of terminology related to the mineral resource and reserves estimate and other information is set out in Appendix 2. A full JORC report will be available on the Company website by end September 2017.

Note that the diagrams presented as part of Appendix 1 (JORC 2012, Table 1 - Ugur deposit) can be accessed via the following link: http://www.rns-pdf.londonstockexchange.com/rns/8283N_-2017-8-11.pdf

Ugur Mine Development

Condemnation drilling to prove the absence of mineralisation below proposed areas of infrastructure, including the waste dump areas, soil storage areas and lay down area for office facilities and mechanical workshops is now complete. Work is progressing as planned on constructing all necessary infrastructure. This includes mine/geology/medical and HSEC offices, hygiene facilities, mechanical workshop, lubricants and spares stores, a weighbridge and diesel store. The weighbridge will be located at the intersection of the mine access road and the haul road to the plant, while other building infrastructure will be located about 500 metres from the open pit boundary designated in accordance with blasting regulations.

The construction of a 4.6 kilometre road between the Ugur deposit and the Company's processing facilities that commenced in May 2017 is complete.

Pre-stripping of the top soil has commenced. Mining by conventional shovel and truck haulage to an Ugur stockpile near the processing facilities is planned to start mid-August 2017, with processing commencing in September 2017.

Competent Person Statement

The information in the announcement that relates to exploration results, minerals resources and ore reserves is based on information compiled by Dr Stephen Westhead, who is a full-time employee of Anglo Asian Mining with the position of Director of Geology & Mining, who is a Fellow of The Geological Society of London, a Chartered Geologist, Fellow of the Society of Economic Geologists, Member of The Institute of Materials, Minerals and Mining and a Member of the Institute of Directors.

Stephen Westhead has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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'. Stephen Westhead consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

Stephen Westhead has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking, to qualify as a "competent person" as defined by the AIM rules. Stephen Westhead has reviewed the resources and reserves included in this announcement.

The information in this announcement that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr Stephen Westhead, a Competent Person who is a Member or Fellow of a 'Recognised Professional Organisation' (RPO) included in a list that is posted on the ASX website from time to time (Chartered Geologist and Fellow of the Geological Society and Member of the Institute of Material, Minerals and Mining). Dr Stephen Westhead is a full-time employee of the company.

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 or contact:

Reza Vaziri	Anglo Asian Mining plc	Tel: +994 12 596 3350
Bill Morgan	Anglo Asian Mining plc	Tel: +994 502 910 400
Stephen Westhead	Anglo Asian Mining plc	Tel: +994 502 916 894
Ewan Leggat	SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel: +44 (0) 20 3470 0470
Soltan Tagiev	SP Angel Corporate Finance LLP	Tel + 44 (0) 20 3470 0470
Lottie Brocklehurst	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177
Susie Geliher	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177

Notes: About Anglo Asian Mining plc

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.

Gold production for the year ended 31 December 2016 from Gedabek totaled 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.

APPENDIX 1

The following table provides a summary of assessment and reporting criteria used at the Ugur deposit for the reporting of exploration results, Mineral Resources and Ore Reserves in accordance with the JORC Table 1 checklist in The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition).

JORC Code, 2012 Edition - Table 1 report: Ugur Deposit (Anglo Asian Mining plc)

Mineral Resource and Ore Reserve statement date: 14 August 2017

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria

JORC Code explanation

Commentary

Sampling techniques

· Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

· Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

· Aspects of the determination of mineralisation that are Material to the Public Report.

· In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

· Full core was split longitudinally 50% using a rock diamond saw and half-core samples were taken at typically 100centimetre intervals or to rock contacts if present in the core run for both mineralisation and wall rock. The drill core was rotated prior to cutting to maximise structure to core axis of the cut core.

· Reverse Circulation (RC) drill samples were collected via a cyclone system in calico sample bags following on site splitting using a standard riffle "Jones" splitter attached to the RC drill rig cyclone, and into plastic chip trays for every one metre interval.

· To ensure representative sampling, diamond drill core was marked considering mineralisation and alteration intensity, after ensuring correct core run marking with regards recovery.

· RC samples were routinely weighed to ensure sample is representative of the metre run.

· Sampling of drill core and RC cutting were systematic and unbiased.

· RC samples varies from 3kg to 6kg, the smaller weight sample related to losses where water was present. The average sample size was 4.7kg, and pulverized to produce a 50g sample for routine Atomic Absorption analysis and check fire assaying.

· Handheld XRF (model THERMO Niton XL3t) was used to assist with mineral identification during field mapping and core logging procedures.

Drilling techniques

· Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

· Both diamond core drilling and reverse circulation (RC) drilling were completed.

· Upper levels ofcore drilling from collar to an average depth of 35metres at PQ (85.0 mm) core single barrel wireline, stepping down to HQ (63.5mm) when necessary.

· Diamond Core Drilling with HQ (63.5mm) core single tube barrel, steeping down to NQ (47.6mm) core barrel when necessary

· Diamond Core drilling with NQ (47.6mm) core single tube barrel

· The proportions of PQ:HQ:NQ drilling were 17:60:23 percentage.

· Oriented drill coring was not used.

· Reverse Circulation drilling using 133 millimetre diameter face sampling drill bit.

· Downhole surveying was carried out on 92% of core drillholes utilizing Reflex EZ-TRAC equipment at a downhole interval of every 9 metres.

· Drilling penetration speeds were also noted to assist with rock hardness indications.

Drill sample recovery

· Method of recording and assessing core and chip sample recoveries and results assessed.

· Measures taken to maximise sample recovery and ensure representative nature of the samples.

· Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

· Core recovery (TCR - total core recovery) was recorded at site, verified at the core logging facility and subsequently entered into the database. The average core recovery was 93%. Recovery measurements were poor in fractured and faulted rocks, however the contract drill crew maximized capability with use of drill muds and reduced core runs to enure best recovery. In these zones where oxidised friable mineralisation was present, average recovery was 86%.

· RC recovery was periodically checked by weighing the sample per metre for RC drill cuttings and compared to theoretical weight.

· Geological information was passed to the drilling crews to make the drillers aware of areas of geological complexity, to maximise recovery of sample through the technical management of drilling (downward pressures, rotation speeds, water flushing, use of clays).

· Zones of faulting and presence of water resulted in variable weights of RC sample, suggesting losses of fines. Historical drilling at adjacent deposits with similar situations tended to underestimate the in-situ gold grades.

· There is no direct relationship between recovery and grade variation, however in core drilling, losses of fines is believed to result in lower gold grades due to washout of fines in fracture zones. This is likely to result in an underestimation of grade, which will be checked during production.

Logging

· Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

· Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

· The total length and percentage of the relevant intersections logged.

· Drill core was logged in detail for lithology, alteration, mineralisation, geological structure, and oxidation state by Anglo Asian Mining geologists, utilising logging codes and data sheets as supervised by the competent person.

· RC cuttings were logged for lithology, alteration, mineralisation, and oxidation state.

· Logging was considered sufficient to support Mineral Resource estimation, mining studies and metallurgical studies.

· Rock Quality Designation (RQD) logs were produced for all core drilling for geotechnical purposes. Fracture intensity and fragmentation proportion analysis was also used for geotechnical information.

· Additionally, two "geotechnical" core drillholes were targeted and drilled to pass through mineralisation into wall rocks of the "planned" backwall to the open pit. This ensured geotechnical data collected related to open pit design work.

· Point load testing and unconfined compressive strength (UCS) tests were conducted on all major rock (mineralised and wall rock) types. This data was utilised in establishing the open pit deign parameters.

· Independent geotechnical studies have been completed by the environmental engineering company, CQA International Limited (CQA), to assess rock mass strength and structural geological relationships for mine design parameters.

· Logging was both quantitative and qualitative in nature. All core wasphotographed in the core boxes to show the core box number, core run markers and a scale, and all RC chip trays were photographed.

· 100% of the core drilling was logged with a total of6,354.75 metres of core and 100% of RC drilling with a total of 4,608.00 metres, that is included in the resource model.

Sub-sampling techniques and sample preparation

· If core, whether cut or sawn and whether quarter, half or all core taken.

· If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

· For all sample types, the nature, quality and appropriateness of the sample preparation technique.

· Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

· Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

· Whether sample sizes are appropriate to the grain size of the material being sampled.

· Full core was split longitudinally 50% using a rock diamond saw and half-core samples were taken at typically 100centimentre intervals or to rock contacts if present in the core run for both mineralisation and wall rock. The drill core was rotated prior to cutting to maximise structure to core axis of the cut core.

· Half core was taken for sampling for assaying, and one half remains in the core box as reference material.

· Reverse Circulation (RC) drill samples were collected in calico sample bags following on site splitting using a standard riffle "Jones" splitter, and into plastic chip trays for every one metre interval.

· Where RC samples were wet, the total sample was collected for drying at the laboratory, following which, sample splitting took place. Primary duplicates have also been retained as reference material.

· RC field sampling equipment was regularly cleaned to reduce the chance of sample contamination by previous samples, on a metre basis by compressed air.

· Both core and RC samples were prepared according best practice, with initial geological control of the half core or RC samples, followed by crushing and grinding at the laboratory sample preparation facility that is routinely managed for contamination and cleanliness control. Sampling practice is considered as appropriate for Mineral Resource Estimation.

· Sample preparation at the laboratory is subject to the following procedure.

Ø After receiving samples at the laboratory from the geology department, all samples are cross referenced with the sample order list.

Ø All samples are dried in the oven at 105-110 degree centigrade temperature

Ø First stage sample crushing to -25mm size

Ø Second stage sample crushing to -10mm size.

Ø Third stage sample crushing to -2mm size.

Ø After crushing the samples are split and 200-250 gramme sample taken.

Ø A 75 micron sized prepared pulp is produced that is subsequently sent for assay preparation.

· Quality control procedures were used for all sub-sampling preparation. This included geological control over the core cutting, and sampling to ensure representativeness of the geological interval.

· 127 Field duplicates of the reverse circulation (RC) samples were collected, representing 2.6% of the total RC metres drilled.

· Sample sizes are considered appropriate to the grain size of the material and style of mineralisation being sampled, by maximizing the sample size, hence the total absence of any BQ drill core.

Quality of assay data and laboratory tests

· The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

· For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

· Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

· Laboratory procedures and assaying and analysis methods are industry standard. They are well documented and supervised by a dedicated laboratory team. The techniques of Atomic Absorptionand Fire Assay were utilised, and as such both partial and total techniques were employed.

· Handheld XRF (model THERMO Niton XL3t) was used to assist with mineral identification during field mapping and core logging procedures.

· Commencement of drilling was 23/09/2016 and completion was 15/07/2017 being 295 days, during which period 4,928 RC samples and 6,447 core drill samples (a total of 11,375 samples) were taken. A total of 1,740 QA/QC samples were measured, equivalent to 15.3%.

· QA/QC procedures included the use of field duplicates of RC samples, blanks, certified standards or certified reference material (CRMs) from OREAS (Ore Research & Exploration Pty Ltd Assay Standards, Australia), in addition to the laboratory control that comprised pulp duplicates, check samples, and replicate samples. This QA/QC system allowed for the monitoring of precision and accuracy of assaying for the Ugur deposit.

· The quality of the QA/QC is consideredadequate for resource and reserve estimation purposes.

· Pulp duplicates analysis showed the largest error in waste or very higher grade samples (see below), Note: with silver classified by gold grade:

Pulp Duplicates for gold and silver
Gold Grade Range g/t	Au (1) Average g/t Au	Au (2) Average g/t Au	Ag (1) Average g/t Ag	Ag (2) Average g/t Ag
Average	1.46	1.48	1.86	1.77
0.0 to ≤0.3	0.10	0.21	1.86	1.77
0.3 to ≤1.0	0.64	0.69	4.51	4.33
1.0 to ≤2.0	1.44	1.44	8.10	7.93
2.0 to ≤5.0	2.82	2.74	13.62	13.52
5.0 to ≤20.0	7.27	7.23	32.09	29.91

· External check assay was carried out by ALS Minerals (OMAC) based in Ireland. The following analytical work was conducted for each sample:

Ø Sample login / pulverize split to 85% < 75 micron / pulverizing QC test / Received sample weight

Ø Ore grade for Gold 30g AA finish

Ø 35 Element Aqua Regia ICP-AES analysis (to include the following elements: Ag, Al, As, B, Ba, Be, Bi, Ca, Cd, Co, Cr, Fe, Ga, Hg, K, La, Mg, Mn, Mo, Ni, P, Pb, S, Sb, Sc, Sr, Th, Ti, TI, U, V, W, Zn.

· Comparison of average gold grades between the on-site laboratory and ALS shows a general bias towards the on-site laboratory under-estimating grade with the exception of high grade (as presented below):

Gold Grade Range	AAZ Average g/t Au	ALS Average g/t Au
Average	0.83	0.90
0.0 to≤0.3	0.08	0.08
0.3 to ≤1.0	0.60	0.70
1.0 to ≤2.0	1.31	1.36
2.0 to ≤5.0	2.97	3.76
5.0 to ≤20.0	12.21	11.16

· Based on QA/QC work, and instances of poor repeatability, it is recommended to carry out thorough QA/QC of all samples during the extraction process and assess laboratory capacities.

Verification of sampling and assaying

· The verification of significant intersections by either independent or alternative company personnel.

· The use of twinned holes.

· Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

· Discuss any adjustment to assay data.

· Significant intersections were verified by a number of company personnel within the management structure of the Exploration Department. Intersections were defined by the exploration geologists, and subsequently verified by the Exploration Manager. Further, independent verification was carried out as part of the due diligence for resource estimation. Assay intersection were cross validated with drill core visual intersections.

· An initial programme of RC drilling was followed up by a core drilling programme where two drillholes were twinned and validated the presence of mineralisation.Reverse circulation drilling as compared with the core showed a positive grade bias of up to 10%. It is suspected that losses may have occurred during the core drilling process especially in very strongly oxidised mineralised zones due to drilling fluid interaction.

· Data entry is supervised by a data manager, and verification and checking procedures are in place. The format of the data is appropriate for direct import into "Datamine"® software. All data is stored in electronic databases within the geology department and backed up to the secure company electronic server that has limited and restricted access. Four main files are created relating to "collar", "survey", "assay" and "geology". Laboratory data is loaded electronically by the laboratory department and validated by the geology department. Any outlier assays are re-assayed.

· Independent validation of the database was made as part of the resource model generation process, where all data was checked for errors, missing data, misspelling, interval validation, and management of zero versus no data entries.

· All databases were considered accurate for the Mineral Resource Estimate.

· No adjustments were made to the assay data.

Location of data points

· Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

· Specification of the grid system used.

· Quality and adequacy of topographic control.

· The exploration area was initially surveyed by high resolution drone survey. Five topographic base stations were installed and accurately surveyed using high precision GPS, that was subsequently tied into the local mine grid using ground based total station surveying (LEICA TS02) equipment. All trench, drill holes collars were then surveyed using total station survey equipment.

· Downhole surveying was carried out on 92% of core drillholes utilizing Reflex EZ-TRAC equipment at a downhole interval of every 9 metres.

· The grid system used is Universal Transverse Mercator (UTM)84WGS zone 38T (Azerbaijan)

· The adequacy of topographic control is adequate for the purposes of resource and reserve modeling (having been validated by both aerial and ground based survey techniques), with a contour interval of 2m metres.

Data spacing and distribution

· Data spacing for reporting of Exploration Results.

· Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

· Whether sample compositing has been applied.

· Drill hole spacing carried out was from 20 metres over the main mineralised zone to 45 metres on the periphery of the resource.

· The data spacing and distribution (20 x 20 metre grid) over the mineralised zones is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. The depth and spacing is considered appropriate for defining geological and grade continuity as required for a JORC Mineral Resource estimate.

· No physical sample compositing has been applied for assay purposes, however for some metallurgical tests, 4 to 5 metre composites were applied.

Orientation of data in relation to geological structure

· Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

· If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

· Detailed surface mapping and subsequent drilling has provided the characteristics of the deposit. The orientation of the drill grid to NNE was designed to maximise the geological interpretation in terms of true contact orientations.

· The Ugur gold deposit is considered as a high sulfidation gold deposit located in rocks ranging from Bajocian (Mid-Jurassic) to Tithonian (Upper-Jurassic) in age. The gold mineralisation is hosted by Upper Bajocian age sub-volcanic rocks, that comprise rhyo-dacitic breccias. These rocks have been intruded into a sub-volcanic sequence that was subsequently subjected to strong hydrothermal alteration.

· The Ugur primary mineralisation is hosted in acidic volcanic rocks, that consists of haematite-barite-quartz-kaolin veins-veinlets and breccia, pyritic stock-stockwork and quartz-sulphide veins. The central surface expression of the mineralisation exhibit accumulations of hydrous ferric oxides cementing breccias of silica with vein-veinlets barite-haematite mineralisation.

· The deposit was emplaced at the intersection of NW, NE, N and E trending structural systems regionally controlled by a first order NW transcurrent fault structure. The fault dips between 70º to 80° to the north-west. The faults of the central zone control the hydrothermal metasomatic alteration and gold mineralisation.

· Given the geological understanding and the application of the drilling grid orientation, grid spacing and vertical drilling, no orientation based sample bias has been identified in the data which resulted in unbiased sampling of structures considering the deposit type.

Sample security

· The measures taken to ensure sample security.

· Regarding drill core: at the drilling site which was supervised by a geologist, the drill core is placed into wooden core boxes that are sized specifically for the drill core diameter. Once the box is full, a wooden lid is fixed to the box to ensure not spillage. Core box number, drill hole number and from/to metres are written on both the box and the lid. The core is then transported to the core storage area and logging facility, where it is received and logged into a data sheet. Core logging, cutting, and sampling takes place at the secure core management area. The core samples are bagged with labels both in the bag and on the bag, and data recorded on a sample sheet. The samples are transferred to the laboratory where they are registered as received, for laboratory sample preparation works and assaying. Hence, a chain of custody procedure has been followed from core collection to assaying and storage of reference material.

· Reverse Circulation samples are bagged at the drill site and sample numbers recorded on the bags. Batches of 10 metre samples are boxed for transport to the logging facility where the geological study and sample preparation for transfer to the laboratory take place.

· All samples received at the core facility are logged in and registered with the completion of an "act". The act is signed by the drilling team supervisor and core facility supervisor (responsible person). All core is photographed, subjected to geotechnical logging, geological logging, samples interval determinations, bulk density, core cutting, and sample preparation (size 3-5 centimetre).

· Daily, all samples are weighed and Laboratory order prepared which is signed by the core facility supervisor prior to release to the laboratory. On receipt at the laboratory, the responsible person countersigns the order.

· After assaying all reject duplicate samples are received from laboratory to core facility (recorded on a signed act). All reject samples are placed into boxes referencing the sample identities and stored in the core facility.

· In the event of external assaying, Anglo Asian Mining utilsed ALS-OMAC in Ireland. Samples selected for external assay are recorded on a data sheet, and sealed in appropriate boxes for shipping by air freight. Communication between the geological department of the Company and ALS monitor the shipment, customs clearance, and receipt of samples. Results are sent electronically by ALS and loaded to the Company database for study.

Audits or reviews

· The results of any audits or reviews of sampling techniques and data.

· Reviews on sampling and assaying techniques were conducted for all data internally and externally as part of the resource and reserve estimation validation procedure. No concerns were raised as to the procedures or the data results. All procedures were considered industry standard and well conducted. QA/QC tolerance concerns of some of batches of assaying has been raised.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria

JORC Code explanation

Commentary

Mineral tenement and land tenure status

· Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

· The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

· The project is located within a current contract area that is managed under a "PSA" production sharing agreement.

· The PSA grants the Company a number of periods to exploit defined licence areas, known as Contract Areas, agreed on the initial signing with the Azerbaijan Ministry of Ecology and Natural Resources ('MENR'). The exploration period allowed for the early exploration of the Contract Areas to assess prospectivity can be extended.

· A 'development and production period' commences on the date that the Company issues a notice of discovery, which runs for 15 years with two extensions of five years each at the option of the Company. Full management control of mining in the Contract Areas rests with Anglo Asian Mining.

· Under the PSA, Anglo Asian is not subject to currency exchange restrictions and all imports and exports are free of tax or other restriction. In addition, MENR is to use its best endeavours to make available all necessary land, its own facilities and equipment and to assist with infrastructure.

· An extract of the contract area boundary is shown via the pdf link at the end of the Press Release.

· The deposit is not located in any national park.

· At the time of reporting no known impediments to obtaining a licence to operate in the area exist and the contract (licence) area agreement is in good standing.

Exploration done by other parties

· Acknowledgment and appraisal of exploration by other parties.

· The "Ugur" deposit, renamed the "Reza" deposit is located within the locally defined Ugur area. The Reza gold deposit was discovered in 2016 by the Gedabek Exploration Group of Anglo Asian Mining who worked on the regional area of Ugur from 2014 year.

· Historical work on the area included regional mapping and large scale regional geophysical programmes (magnetic and gravity) by Soviet geologists.

· Prior to the drill programme for resource estimate, Anglo Asian Mining carried out the following work:

Ø Stream sediment sampling 7 samples (2014), 16 samples (2016),

Ø Stream Grab sampling 37 samples (2016)

Ø Geological mapping, 90 000m2 1:10 000 (2014-2015), 35 000m2 1:1 000 (2016)

Ø Outcrop sampling 1,460 samples (2016)

Ø Trenching & shallow pits 610 samples (2016)

Geology

· Deposit type, geological setting and style of mineralisation.

· The Reza gold deposit is located in Gedabek Ore District of the Lesser Caucasus in NW of Azerbaijan, 48 kilometres East of the city of Ganja, and 4.7 kilometres north west of Gedabek open-pit gold copper mine.

· The exploration "centre" of the project is the outcrop, independently located on Google Earth at Latitude 40°37'13.10"N and Longitude 45°46'15.34"E. The known gold mineralisation has an estimated north-south strike length of 400 m and a total area of approximately 20 hectares or 0.2 km². The deposit was found based on gold-silver assays of surface outcrop rock chip samples over an area of 2.5 kilometres North-South by 2 kilometres East-West, with the Reza gold deposit located on the central part.

· Secondary quartzites were formed under the influence of Atabek-Slavyanka plagiogranite intrusion with exposures observed to the north from the gold mineralisation area. The area in tectonic attitude is confined to Gyzyldjadag fault of Northeastern sub-latitudinal strike 080° with a vertical dip.

· Rocks in the alteration zone area crumpled, argillic altered, brecciated, with strongly limonite and haematite alteration, where crystalline haematite is observed. Intensive barite and barite-hematite vein and veinlets, also gossan zones are present in outcrop. The main mineralisation zones have been sampled in three trenches with a total length of 270metres(trenches #1, #2 and #3) and received positive results for gold and silver. About 550 samples from main outcrops #1 and #2 were taken.

· The main mineralised zone comprises secondary quartzites with vein-veinlets barite-haematite mineralisation over which remain accumulations of hydrous ferric oxides cementing breccias of quartz and quartzites. Erosion surfaces exhibit "reddish mass" being anoxidation product of stock and stockwork haematite ores.

· A Lithological-structural map of the Gedabek Ore District is presented via the pdf link at the end of the Press Release.

· The Ugur gold deposit is considered as a high sulfidation gold deposit located in rocks ranging from Bajocian (Mid-Jurassic) to Tithonian (Up-Jurassic) in age. The gold mineralisation is hosted by an Upper Bajocian age sub-volcanic rocks, that comprise rhyo-dacitic breccias. These rocks have been intruded into a sub-volcanic sequence that was subsequently subjected to strong hydrothermal alteration.

Drill hole Information

· A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

o hole length.

· If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

· A summary of the type and metres of drilling completed is shown below:

Type of drill-hole	Type	Start date	Finish date	Number of drill holes	Length
Type of drill-hole	Type	Start date	Finish date	Number of drill holes	(metres)
Reverse circulation	Reverse circulation	23-Sep-16	14-Nov-16	56	1,842
Core	Diamond	04-Oct-16	25-Jun-17	50	6,355
Geotechnical	Diamond	16-Apr-17	27-Apr-17	2	164
Reverse circulation	Reverse circulation	19-Mar-17	09-Jul-17	33	2,766
TOTAL DRILLING				141	11,127

· Coordinates and RL of the drill collars and depth to end of drill hole are presented below:

Ø DD drillholes are diamond core drillholes

Ø RC drillhole are reverse circulation drillholes

hole_id	x	y	z	max_depth	hole_type
GTDD01	565173.423	4496827.437	1,907.03	76.5	DD
GTDD02	565238.685	4496871.059	1,886.89	87.25	DD
RGRC01	565226.845	4496897.396	1,885.51	84	RC
RGRC02	565188.902	4496909.231	1,896.80	82	RC
RGRC03	565199.867	4496885.521	1,895.03	120	RC
RGRC04	565175.67	4496873.255	1,902.65	102	RC
RGRC05	565212.099	4496857.204	1,895.82	111	RC
RGRC06	565187.095	4496847.644	1,902.83	90	RC
RGRC07	565201.521	4496946.672	1,888.80	113	RC
RGRC08	565227.273	4496960.209	1,879.43	80	RC
RGRC09	565240.567	4496934.862	1,874.38	81	RC
RGRC10	565264.685	4496947.009	1,867.17	54	RC
RGRC11	565278.053	4496920.284	1,866.33	68	RC
RGRC12	565254.444	4496916.843	1,872.04	69	RC
RGRC13	565264.942	4496883.101	1,878.37	85	RC
RGRC14	565233.946	4496857.616	1,890.95	90	RC
RGRC15	565250.738	4496845.542	1,890.14	90	RC
RGRC16	565176.519	4496936.975	1,899.80	96	RC
RGRC17	565218.676	4496980.836	1,883.64	75	RC
RGRC18	565151.143	4496921.426	1,910.78	104	RC
RGRC19	565161.878	4496899.425	1,907.12	87	RC
RGRC20	565254.44	4496973.287	1,870.34	75	RC
RGRC21	565208.569	4496903.57	1,890.33	91	RC
RGRC22	565218.709	4496942.994	1,884.00	76	RC
RGRC23	565195.134	4496866.565	1,898.72	79	RC
RGRC24	565182.973	4496953.864	1,896.01	120	RC
RGRC25	565196.049	4496992.538	1,887.24	78	RC
RGRC26	565278.344	4496984.036	1,862.07	61	RC
RGRC27	565239.013	4496998.68	1,878.43	80	RC
RGRC28	565310.589	4496952.217	1,854.41	103	RC
RGRC29	565302.606	4496935.639	1,859.11	90	RC
RGRC30	565297.765	4496915.477	1,863.32	48	RC
RGRC31	565284.229	4496897.028	1,869.72	75	RC
RGRC32	565282.66	4496876	1,875.81	80	RC
RGRC33	565313.5	4497022.3	1,849.60	103	RC
RGRC34	565165	4496956.9	1,900.40	120	RC
RGRC35	565179.9	4497001.7	1,884.40	100	RC
RGRC36	565140.1	4496950.3	1,899.00	100	RC
RGRC37	565157.4	4496879.7	1,908.00	106	RC
UGDD01	565277.6	4496960.5	1,863.00	285.5	DD
UGDD02	565214.3	4496923.1	1,887.90	401.3	DD
UGDD03	565293.8	4496996.2	1,857.20	138.5	DD
UGDD04	565260.1	4496900.9	1,875.10	123.5	DD
UGDD05	565241.1	4496828.3	1,895.20	139	DD
UGDD06	565220.8	4496877.3	1,890.40	133.35	DD
UGDD07	565228.2	4496919.9	1,883.00	130	DD
UGDD08	565242.7	4496955.5	1,874.00	124	DD
UGDD09	565196.9	4496931.4	1,891.90	126.2	DD
UGDD10	565179.6	4496888.9	1,901.70	122.15	DD
UGDD11	565729	4496925.5	1,820.70	151.5	DD
UGDD12	565166.9	4496852.5	1,908.00	125	DD
UGDD13	565611	4496922.5	1,827.40	151	DD
UGDD14	565163.6	4496937	1,905.20	132	DD
UGDD15	565771.7	4497040	1,803.80	250	DD
UGDD16	565147.4	4496903.4	1,912.40	134	DD
UGDD17	565130.3	4496869.2	1,919.70	110	DD
UGDD18	565220.2	4497005.4	1,883.00	125.4	DD
UGDD19	565253.1	4496998.2	1,873.30	117	DD
UGDD20	565249.9	4496873.2	1,884.10	125	DD
UGDD21	565207.6	4496970.2	1,885.90	104.5	DD
UGDD22	565269.9	4497031	1,867.20	136	DD
UGDD23	565299.8	4496844.4	1,880.50	117	DD
UGDD24	565236.6	4497043.7	1,869.20	134	DD
UGDD25	565305.5	4496888.3	1,870.80	120	DD
UGDD26	565324.4	4496926.9	1,854.10	135	DD
UGDD27	565284.6	4496933	1,863.70	124	DD
UGDD28	565311	4496997.8	1,849.70	119.3	DD
UGDD29	565313.6	4497059	1,846.70	130	DD
UGDD30	565297.8	4496975.7	1,854.60	126	DD
UGDD31	565210	4496841.9	1,898.40	109	DD
UGDD32	565171.9	4496986.5	1,890.20	113	DD
UGDD33	565335.4	4496965	1,842.90	122	DD
UGDD34	565119.6	4496957.4	1,898.90	133	DD
UGDD35	565109.4	4496919.1	1,916.20	130.5	DD
UGDD36	565351.1	4497001.9	1,833.40	122.5	DD
UGDD37	565115.5	4496831.8	1,930.20	103.5	DD
UGDD38	565197.6	4497052.6	1,866.50	122	DD
UGDD39	565094.7	4496884.3	1,925.80	126.5	DD
UGDD40	565075.5	4496842.1	1,932.60	150	DD
UGDD41	565087	4496754.7	1,913.90	121.5	DD
UGDD42	565115.4	4496878.5	1,924.90	80	DD
UGDD43	565130.9	4496909.9	1,916.40	61.75	DD
UGDD44	565188.4	4496977.7	1,890.00	61.8	DD
UGDD45	565194.1	4497020.6	1,878.80	71	DD
UGDD46	565228.9	4497023.8	1,878.00	70	DD
UGDD47	565262.6	4497016.5	1,870.40	71.5	DD
UGDD48	565298.4	4497007.9	1,856.90	67	DD
UGDD49	565167.4	4496915.1	1,905.60	61	DD
UGDD50	565140.6	4496999.8	1,882.60	67	DD
UGRC01	565169.7	4496819.6	1,908.80	33	RC
UGRC02	565146.5	4496867.7	1,913.20	34	RC
UGRC03	565305.8	4496888.9	1,871.10	34	RC
UGRC04	565275.6	4496958.6	1,863.30	27	RC
UGRC05	565309.2	4496928.2	1,858.00	13	RC
UGRC06	565343	4496922.9	1,850.30	32	RC
UGRC07	565320.4	4496969.7	1,847.30	34	RC
UGRC08	565347.6	4497022.1	1,833.50	31	RC
UGRC09	565336.7	4497000.4	1,837.60	22	RC
UGRC10	565266.6	4496930	1,867.20	34	RC
UGRC11	565290.5	4496997.6	1,857.70	34	RC
UGRC12	565267.4	4497018.4	1,869.10	34	RC
UGRC13	565234.9	4496976.4	1,877.70	34	RC
UGRC14	565212.8	4496921.8	1,888.00	34	RC
UGRC15	565222.6	4497010.3	1,882.50	34	RC
UGRC16	565184.4	4496970.7	1,892.90	34	RC
UGRC17	565204.8	4496869.1	1,896.00	34	RC
UGRC18	565244.7	4496887.2	1,882.10	34	RC
UGRC19	565090.1	4496843.9	1,931.90	34	RC
UGRC20	565163.8	4496916.4	1,905.70	30	RC
UGRC21	565240.9	4497048	1,867.10	34	RC
UGRC22	565284.2	4497058.9	1,854.60	34	RC
UGRC23	565295.5	4496849	1,880.00	34	RC
UGRC24	565106.9	4496906.4	1,921.20	34	RC
UGRC25	565140.8	4496976.5	1,891.60	25	RC
UGRC25A	565144.7	4496977.5	1,891.60	34	RC
UGRC26	565173.9	4497025.1	1,875.20	31	RC
UGRC27	565229.9	4496839.6	1,895.30	34	RC
UGRC28	565355	4496609.9	1,921.10	34	RC
UGRC29	565303.1	4496611.9	1,915.40	34	RC
UGRC30	565318.5	4496657.4	1,915.50	34	RC
UGRC31	565190.3	4496748.9	1,906.10	34	RC
UGRC32	565209.5	4496795.3	1,904.00	34	RC
UGRC33	565147.3	4496776.7	1,914.30	34	RC
UGRC34	565126.2	4496745	1,909.80	34	RC
UGRC35	565057	4496754	1,915.30	34	RC
UGRC36	565104.5	4496793.5	1,923.80	34	RC
UGRC37	565058.9	4496793.8	1,923.90	34	RC
UGRC38	565027.4	4496748.3	1,918.40	34	RC
UGRC39	564988.8	4496778.9	1,921.70	34	RC
UGRC40	565022.2	4496827.5	1,922.50	34	RC
UGRC41	565045.5	4496870.5	1,922.00	34	RC
UGRC42	565057.2	4496912.7	1,913.60	34	RC
UGRC43	564979	4496851.6	1,912.40	34	RC
UGRC44	564948.3	4496808.5	1,919.60	34	RC
UGRC45	564909.6	4496841.8	1,912.60	34	RC
UGRC46	564883.7	4496797.6	1,925.90	34	RC
UGRC47	564921.3	4496775.2	1,926.50	34	RC
UGRC48	564852.4	4496758.8	1,929.80	34	RC
UGRC49	564810.6	4496782.7	1,932.90	34	RC
UGRC50	564840.8	4496824.2	1,921.10	34	RC
UGRC51	564765.9	4496810.9	1,933.80	34	RC
UGRC52	564743.3	4496771.6	1,942.90	34	RC
UGRC53	565702.2	4497046.2	1,785.40	34	RC
UGRC54	565794.7	4497051	1,803.50	34	RC
UGRC55	565770.8	4497019.6	1,807.90	34	RC

· Regarding dip and azimuth data of the core drill holes, all drill holes were vertical. The largest variation of all drill holes was 3.2 degrees off the vertical confirmed by downhole surveying. The full data set will be presented in the final JORC Mineral Resources and Ore Reserves report.

· Intercept information has been previously provided in regulatory announcements (see section "substantive exploration data" below).

· The diameter of the drill core for each drill hole is presented below:

hole_id	from	to	length	diameter
UGDD01	0.00	127.00	127.00	HQ
UGDD01	127.00	285.50	158.50	NQ
UGDD02	0.00	72.50	72.50	PQ
UGDD02	72.50	184.00	111.50	HQ
UGDD02	184.00	401.30	217.30	NQ
UGDD03	0.00	42.00	42.00	PQ
UGDD03	42.00	138.50	96.50	HQ
UGDD04	0.00	40.00	40.00	PQ
UGDD04	40.00	123.50	83.50	HQ
UGDD05	0.00	42.00	42.00	PQ
UGDD05	42.00	139.00	97.00	HQ
UGDD06	0.00	43.00	43.00	PQ
UGDD06	43.00	133.35	90.35	HQ
UGDD07	0.00	60.15	60.15	PQ
UGDD07	60.15	130.00	69.85	HQ
UGDD08	0.00	70.00	70.00	PQ
UGDD08	70.00	124.00	54.00	HQ
UGDD09	0.00	49.00	49.00	PQ
UGDD09	49.00	126.20	77.20	HQ
UGDD10	0.00	63.00	63.00	PQ
UGDD10	63.00	122.15	59.15	HQ
UGDD11	0.00	65.00	65.00	PQ
UGDD11	65.00	151.50	86.50	HQ
UGDD12	0.00	57.70	57.70	PQ
UGDD12	0.00	125.00	125.00	HQ
UGDD13	0.00	58.00	58.00	PQ
UGDD13	58.00	151.00	93.00	HQ
UGDD14	0.00	40.00	40.00	PQ
UGDD14	40.00	132.00	92.00	HQ
UGDD15	0.00	60.00	60.00	PQ
UGDD15	60.00	250.00	190.00	HQ
UGDD16	0.00	48.00	48.00	PQ
UGDD16	48.00	134.00	86.00	HQ
UGDD17	0.00	59.50	59.50	PQ
UGDD17	59.50	110.00	50.50	HQ
UGDD18	0.00	35.50	35.50	PQ
UGDD18	35.50	125.40	89.90	HQ
UGDD19	0.00	33.00	33.00	PQ
UGDD19	33.00	117.00	84.00	HQ
UGDD20	0.00	41.50	41.50	PQ
UGDD20	41.50	125.00	83.50	HQ
UGDD21	0.00	30.00	30.00	PQ
UGDD21	30.00	104.50	74.50	HQ
UGDD22	0.00	37.00	37.00	PQ
UGDD22	37.00	136.00	99.00	HQ
UGDD23	0.00	34.00	34.00	PQ
UGDD23	34.00	117.00	83.00	HQ
UGDD24	0.00	37.00	37.00	PQ
UGDD24	37.00	134.00	97.00	HQ
UGDD25	0.00	16.00	16.00	PQ
UGDD25	16.00	120.00	104.00	HQ
UGDD26	0.00	22.00	22.00	PQ
UGDD26	22.00	135.00	113.00	HQ
UGDD27	0.00	37.00	37.00	PQ
UGDD27	37.00	124.00	87.00	HQ
UGDD28	0.00	24.00	24.00	PQ
UGDD28	24.00	119.30	95.30	HQ
UGDD29	0.00	11.00	11.00	PQ
UGDD29	11.00	130.00	119.00	HQ
UGDD30	0.00	34.00	34.00	PQ
UGDD30	34.00	126.00	92.00	HQ
UGDD31	0.00	14.00	14.00	PQ
UGDD31	14.00	109.00	95.00	HQ
UGDD32	0.00	7.00	7.00	PQ
UGDD32	7.00	113.00	106.00	HQ
UGDD33	0.00	20.50	20.50	PQ
UGDD33	20.50	122.00	101.50	HQ
UGDD34	0.00	20.60	20.60	PQ
UGDD34	20.60	122.00	101.40	HQ
UGDD35	0.00	26.50	26.50	PQ
UGDD35	26.50	130.50	104.00	HQ
UGDD36	0.00	31.00	31.00	PQ
UGDD36	31.00	122.50	91.50	HQ
UGDD37	0.00	27.00	27.00	PQ
UGDD37	27.00	79.00	52.00	HQ
UGDD37	79.00	103.50	24.50	NQ
UGDD38	0.00	9.00	9.00	PQ
UGDD38	9.00	122.00	113.00	HQ
UGDD39	0.00	45.00	45.00	PQ
UGDD39	45.00	126.50	81.50	HQ
UGDD40	0.00	22.00	22.00	PQ
UGDD40	22.00	150.00	128.00	HQ
UGDD41	0.00	21.00	21.00	PQ
UGDD41	21.00	121.50	100.50	HQ
UGDD42	0.00	21.00	21.00	PQ
UGDD42	21.00	80.00	59.00	HQ
UGDD43	0.00	21.00	21.00	PQ
UGDD43	21.00	61.75	40.75	HQ
UGDD44	0.00	21.00	21.00	PQ
UGDD44	21.00	61.80	40.80	HQ
UGDD45	0.00	29.00	29.00	PQ
UGDD45	29.00	71.00	42.00	HQ
UGDD46	0.00	22.00	22.00	PQ
UGDD46	22.00	70.00	48.00	HQ
UGDD47	0.00	24.00	24.00	PQ
UGDD47	24.00	71.50	47.50	HQ
UGDD48	0.00	18.00	18.00	PQ
UGDD48	18.00	67.00	49.00	HQ
UGDD49	0.00	20.00	20.00	PQ
UGDD49	20.00	61.00	41.00	HQ
UGDD50	0.00	7.00	7.00	PQ
UGDD50	7.00	67.00	60.00	HQ

Data aggregation methods

· In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

· Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

· The assumptions used for any reporting of metal equivalent values should be clearly stated.

· Drilling results have been reported using intersection intervals based on a gold grade above 0.3 gramme per tonne, and internal waste greater or equal to 1 metre thickness. Grade of both gold and silver within the intersections have been state. The results are presented to 2 decimal places.

· No data aggregation and no sample compositing was performed.

· Drill sample intervals are based on a 1 metre sample interval, unless stated in the table of drill intersections as previously reported (see the section "other substantive exploration data" below).

· No metal equivalent values have been reported.

Relationship between mineralisation widths and intercept lengths

· These relationships are particularly important in the reporting of Exploration Results.

· If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

· If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').

· The relationship between mineralisation widths and intercept lengths in the case of the Reza deposit is less critical as the mineralisation dominantly forms a broad scale oxide zone. The mineralisation does show trends of grade distribution as determined in the block modelling process.

· All intercepts are reported as down-hole lengths. All drilling for the resource and reserve estimate were vertical (see section "Diagrams").

Diagrams

· Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported. These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Schematic plan of trench, core and RC drill holes
showing section lines for interpretationare shown via the pdf link at the end of the Press Release.

Balanced reporting

· Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

· All sampled intervals have been previously reported by Anglo Asian Mining via regulated news service (RNS) announcements of the London Stock Exchange (AIM). These data are available on the Anglo Asian Mining website.

Other substantive exploration data

· Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

· Previous Anglo Asian Mining announcements on the AIM that report on exploration data of the Ugur deposit include:

Ø 17 October 2016; New Gold Discovery at its Gedabek Licence Area

Ø 16 December 2016; Significant oxide zone drilled at newly discovered Ugur deposit

Ø 18 April 2017; Strategy update and Q1 2017 review - Gedabek gold, copper and silver mine, Azerbaijan

Ø 8 May 2017; Ugur Gold Deposit Development & 2017 Strategy Update

Ø 24 July 2017; Ugur Gold Deposit Development and Gedabek Exploration Update

· Additional information including photographs of the Ugur area can be viewed on the Anglo Asian Mining website, http://www.angloasianmining.com

Further work

· The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

· Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

· No further exploration drilling is planned at the Reza deposit of Ugur. Exploration will continue in the Ugur area to test for extensions of the mineralised zones and for other "centres" of mineralisation. Details of this work has not been planned yet. The intent is to initially produce JORC Mineral Resources and Ore Reserves (see Section 3 and Section 4 of this document) and to bring the deposit into production.

· No diagrams to show possible extensions are presented in this document as the work is yet to commence.

Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)

Criteria

JORC Code explanation

Commentary

Database integrity

· Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

· Data validation procedures used.

· The Ugur database is stored in Excel ® software. A dedicated database manager has been assigned and checks the data entry against the laboratory report and survey data.

· Geological data is entered by a geologist to ensure no confusion over terminology, while laboratory assay data is entered by the data entry staff.

· A variety of checks are in place to check against human error of data entry.

· All original geological logs, survey data and laboratory results sheets are retained in a secure location.

· Independent consultants "Datamine" who carried out the resource estimation also carried out periodic database validation during the period of geological data collection, as well as on completion of the database.

· The validation procedures used include random checking of data as compared the original data sheet, validation of position of drillholes in 3D models, and targeting figures deemed "anomalous" following statistical analysis. Hence there are several level of control.

Site visits

· Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

· If no site visits have been undertaken indicate why this is the case.

· The CP is an employee of the company and as such has been actively in a position to be fully aware of all stages of the exploration and project development. The CP has worked very closely with the independent resource and reserve estimation staff of Datamine, both on site and remotely, to ensure knowledge transfer of the geological situation, to allow geological "credibility" to the modelling process. Extensive visits have been carried out by two staff of Datamine over the last year and have been fully aware of the Ugur project development. All aspects of the data collection and data management has been observed.

Geological interpretation

· Confidence in (or conversely, the uncertainty of ) the geological interpretation of the mineral deposit.

· Nature of the data used and of any assumptions made.

· The effect, if any, of alternative interpretations on Mineral Resource estimation.

· The use of geology in guiding and controlling Mineral Resource estimation.

· The factors affecting continuity both of grade and geology.

· The geological interpretation is considered robust. Geological data collection includes surface mapping, stream sediment and outcrop sampling, RC and core drilling. This has amassed a significant amount of information for the deposit. Various software have been used to model the deposit, including Leapfrog ®, Surpac® and Datamine ®, using dynamic anisotropy to develop the mineralised shells which were subsequently verified.

· The geological team have worked in the licence area for many years and the understanding and confidence of the geological interpretation is considered high.

· No alternative interpretations of the geology have had any effect on the resource model.

· The geology has guided the resource estimation, especially the structural control, where for example faulting has defined "hard" boundaries to mineralisation. The deposit structural orientation was used to control the orientation of the drilling grid and the resource estimation search ellipse orientation.

· Grade and geological continuity has been established by the extensive 3D data collection. The deposit is relatively small (300 metres by 200 metres), and the continuity is well understood, especially in relation to structural effects.

· A geological interpretation of main mineralised bodywas completed utilising geological sections typically at spacings of about 20m. These interpretations were used to form a wireframe (solid) in Datamine, that was subsequently used as the main domain/mineralised zones for resource estimation.

Dimensions

· The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

· The footprint of the whole mineralisation is about 300metres by 200 metres, with about 110 metres overall thickness. The main mineralised domain is 230 metres by 170 metres in plan and about 100metres thickness.

Estimation and modelling techniques

· The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

· The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

· The assumptions made regarding recovery of by-products.

· Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).

· In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

· Any assumptions behind modelling of selective mining units.

· Any assumptions about correlation between variables.

· Description of how the geological interpretation was used to control the resource estimates.

· Discussion of basis for using or not using grade cutting or capping.

· The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

· A geological interpretation of main mineralised body was completed utilising geological sections typically at spacings of about 20m. These interpretations were used to form a wireframe (solid) in Datamine, that was subsequently used as the main domain/mineralised zone for resource estimation. Estimation process includes:

· Drill holes data were flagged as inside and outside of main zones of mineralisation. Outlier study of gold and silver showed a few samples out of range. A top-cut grade of 16 g/t for gold and 108 g/t for silver was applied for data inside the main mineralised zone.

· Drill holes data composited by 2m along the holes.

· Variogram analyses of gold data has been carried out using Datamine software. The ranges of variograms at major and semi-major direction are 30 metres and 23 metres. Minor directions show poor continuity and it considered as 10m. The major Azimuth is 040 degrees with 20 degree dip.

· Three estimation passes were used; the first search was based upon the variogram ranges in the three principal directions(30x25x10). The second search was 1.5 times and third search was 2 times of first search. Min and Max of samples were 4 and 14 for first and second search and 1 and 14 for third search.

· Estimation was carried out using ordinary kriging at the parent block.

· More than 90% of blocks inside the main domain/mineral zoneare estimated in first search as they fall in the dense drilling area, being the main zone of mineralisation.

· The estimated gold block model grades were visually validated against the input drillhole data. Comparisons were carried out against the drillhole data by bench.

· The resource estimation was carried out using Datamine Studio RM software.

· No previous mining has occurred to allow for check estimates. This will be a requirement on production startup.

· The deposit contains gold and silver mineralisation, with minor copper, and other base metal were tested, and full multi-element analysis was carried out at external laboratories. Results showed no other by-products.

· Deleterious non-grade elements were checked and the situation of ARD studies. However, given the extraction dominantly of oxide ores (87% oxide, 3% sulphide, 0.1% transition, 9.9% unclassified within the samples zone) and the processing at a current facility, there are no immediate concerns. Should future mining of the sulphide zone occur or sulphide be released, independent on-site environmental engineers will monitor and recommend mitigation of ARD situations.

· A block model was created with parent size of 5x5x5 metres. Sub-blocking is not allowed in X and Y but in Z direction minimum to ½ of block height. This is considered optimum with regards the data spacing and for the planned extraction design, with 5 metre open pit benches in "ore".

Moisture

· Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

· Tonnage has been estimated on a dry basis

Cut-off parameters

· The basis of the adopted cut-off grade(s) or quality parameters applied.

· Continuity of grade was assessed at a range of cut-offs between 0.1 g/t gold and 1.0 g/t gold in 0.1 g/t increments. A tonnage-Grade table and graph was prepared based on different cut-off. Following interrogation of data and continuity, the resources area reported above 0.2 g/t gold grade cut-off.

Mining factors or assumptions

· Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

· Given the geometry of the mineralised zone, the fact the central part is exposed at surface, and a very low forecast waste ratio, an open pit mining method is selected. Mining dilution and mining dimensions are referenced in Section 4 (Estimation and Reporting of Ore reserves).

· Other mining factor are not applied at this stage.

Metallurgical factors or assumptions

· The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

· The Company currently operates an agitated leach plant, a flotation plant, a crushed heap leach facility, and a run-of-mine dump leach facility. As such, the basis for assumptions and predictions of processing routes and type of "ores" suitable for each process available are well understood.

· Metallurgical testwork has been carried out to assess the amenability of the Ugur mineralisation to cyanidation and leaching processes. The results showed a high level of amenability. The mineralisation is an "oxide" type, that is relatively soft, and requires comparatively low levels of processing reagents for recovery.

· Metallurgical testwork was carried out on samples with a mean of a range of gold grades; 3.6g/t, 2.5g/t, 1.5g/t and 1.0g/t. The results for a 48 hour bottle roll test showed high gold recovery and low cyanide usage (see below).

Leaching, %
Au	Ag
88.5	82.8
85.7	62.0
95.0	60.5
83.8	73.2

· No metallurgical factors assumptions have been used in mineral resource estimate.

Environmen-tal factors or assumptions

· Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

· The Ugur deposit is located within a mining contract area in which the company operates two other mines. As part of the initial start-up, environmental studies and impacts were assessed and reported. This includes the nature of process waste as managed in the tailings management facility (TMF). Other waste products are fully managed under the HSEC team of the company (including disposal of mine equipment waste such as lubricants and oils).

· An independent environmental engineering company CQA International Ltd (CQA) has carried out a study of Ugur including installing baseline monitoring systems, and will be integral to the extraction and processing of the ores.

· No environmental assumptions have been used in mineral resource estimation.

Bulk density

· Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

· The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

· Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

· Bulk density measurements have been determined. A total of 538 samples were tested from selected core samples, that comprised both mineralisation and wall rocks. The density was tested by rock type, extent of alteration and depth.The method used was hydrostatic weighing.

· Of the 538 samples, 426 density measurement samples are insidemineralisation wireframes. The average density of these samples is 2.62 t/m³ and has been used for resource calculation.

· Density data are considered appropriate for Mineral Resource and Mineral Reserve estimation.

Classification

· The basis for the classification of the Mineral Resources into varying confidence categories.

· Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

· Whether the result appropriately reflects the Competent Person's view of the deposit.

· The Mineral Resource has been classified on the basis of confidence in the continuity of mineralised zones, as assessed by the geological block model based on sample density, drilling density, and confidence in the geological database. Depending on the estimation parameters (number of samples per search volume), the resources were classified as Measured, Indicated or Inferred Mineral resources, as defined by the parameters below:.

Ø Blocks inside the mineralised zonethat capture samples with at least 2 drill holesin first search volume were considered as Measured Resources.

Ø Blocks inside the mineralised zonethat capture samples from at least 2 holes data in second search volume are considered as Indicated Resources.

Ø Blocks inside the mineralised zone which fall within with in third search volume are considered as Inferred Resources.

Ø All blocks outside of main central mineralised zone are considered as Inferred.

· The results reflect the Competent Person's view of the deposit.

Audits or reviews

· The results of any audits or reviews of Mineral Resource estimates.

· Datamine company developed and audited the Mineral Resource block model. Two Datamine engineers worked on the resources and reserves and were able to verify work and procedure.

· Datamine have been involved with other mining projects of the company within the same licence area as Ugur and as such are familiar with the processing methods available, value chain of the mining and cost structure. The data has been audited and considered robust for Mineral Resource estimates.

· Internal company and external reviews of the Mineral Resources yield estimates that are consistent with the Mineral Resource results. The methods used include sectional estimation, and three-dimensional modelling utilising both geostatistical and inverse distance methodologies. All results showed good correlation.

· A final report is expected to suggest recommendations includingupgrading laboratory and management systems, and the future implementation of a laboratory information management system. The grade control data produced during mining should be correlated back into the resource model to check for consistency or variation.

Discussion of relative accuracy/ confidence

· Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

· The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

· These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

· Statistical and visual checking of the block model is as expected given the geological data. The mineralisation is tightly constrained geologically, and the level of data acquired and the resource estimation approach is to international best practice. The application of both statistical and geostatistical approaches results in high confidence of the resource resulting in the appropriate relative amounts of Measured, Indicated and Inferred Mineral resources. The periphery of the deposit where sample density was not as high as over main mineralised zone, yielded much of the Inferred category resource.

· The drilling grid and sample interval is sufficient to assign Measured and Indicated Mineral Resources.

· The Mineral Resource statement relates to a global estimate for the Ugur deposit.

· The Ugur deposit has not been previously mined, so no production data is available for comparison. It is recommended that on commencement of extraction of mineralisation, grade control and mining data are used to compare with the Resource model.

Section 4 Estimation and Reporting of Ore Reserves

(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)

Criteria

JORC Code explanation

Commentary

Mineral Resource estimate for conversion to Ore Reserves

· Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve.

· Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.

· Refer to Section 3 (Estimation and Reporting of Mineral Resources)

· A JORC resource estimate comprising Measured, Indicated and Inferred Resources has been made for the Ugur Deposit (as tabulated below):

Mineral Resources	Tonnage (Mt)	Gold Grade (g/t)	Silver Grade (g/t)
Measured	4.12	1.2	6.3
Indicated	0.34	0.8	3.9
Measured+Indicated	4.46	1.2	6.2
Inferred	2.50	0.3	2.1
Total	6.96	0.9	4.7

· The contained metal in ounces of gold and silver is presented below:

Mineral Resources	Gold ('000 ounces)	Silver ('000 ounces)
Measured	164	841
Indicated	8	44
Measured+Indicated	172	884
Inferred	27	165
Total	199	1,049

· The relative % of contained metal shows a very high % of Measured Resource and Indicated Resource that can be tested for Reserve estimation.

Mineral Resources	% gold ounces	% silver ounces
Measured	82%	80%
Indicated	4%	4%
Measured+Indicated	87%	84%
Inferred	13%	16%
Total	100%	100%

· The Ore Reserve statement is inclusive (not additional to) of the Resource statement.

Site visits

· Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

· If no site visits have been undertaken indicate why this is the case.

· The Competent Person is an employee of the company and as such has been actively in a position to be fully aware of all stages of the exploration and project development including the estimation of Mineral resources and Ore Reserves. The Competent Person has worked very closely with the independent resource and reserve estimation staff of Datamine company, both on site and remotely, to ensure knowledge transfer of the geological situation, to allow geological "credibility" to the modelling process. Extensive visits have been carried out by two staff of Datamine (one of whom estimated the resources and one estimate the reserves) over the last year and have been fully aware of the Ugur project development. All aspects of the data collection and data management has been observed.

Study status

· The type and level of study undertaken to enable Mineral Resources to be converted to OreReserves.

· The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.

· Study undertaken to enable Mineral Resources to be converted to Ore Reserves are considered as being Feasibility level. The ore will be mined utlising the current mining fleet and will be processed in the current processing facilities of the Company which operates two other mines in the same licence/contract area. The Ugur deposit is considered to part of the same geological terrain.

· A technically achievable mine plan that is economically viable has been designed taking into consideration the JORC resources and modifying factors.

Cut-off parameters

· The basis of the cut-off grade(s) or quality parameters applied.

· Financial factors included in the cut-off grade estimates are process and overhead costs, mining dilution, payable gold and silver price, and processing recovery and used in the basis for cut-off grade calculation.

· The ore from Ugur can be processed by three different available processing methods within the Gedabek contract area, namely agitation leach (AGL), heap leach of crushed material (HLC) and heap leach of blasted material or run-of-mine (ROM).

· The acceptable gold headgrade in grammes per tonne gold for AGL, HLC and ROM is 1.8g/t ,0.8g/t and 0.47g/t respectively.

· Further to the gold cut-off grade calculations, after long term scheduling the mill cut-off grade resulted in 0.3g/t gold.

Mining factors or assumptions

· The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design).

· The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc.

· The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre-production drilling.

· The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate).

· The mining dilution factors used.

· The mining recovery factors used.

· Any minimum mining widths used.

· The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion.

· The infrastructure requirements of the selected mining methods.

· On establishing the modifying factors, the Mineral Reserve has been optimized using the Datamine NPV ® software. This resulted in the economic open pit shell and contained mineable material in that pit shell. Subsequently, this was further optimized in the mine design process, where bench toe and crest, catch benches and haul road layout was designed. The final mineable material comprised the Ore Reserves.

· The mining method selected is by open pit method given the orebody geometry and the position relative to topographic surface. The central part of the orebody is exposed at surface, and over the remaining 70% surface area of the orebody there is a top soil cover varying in thickness between zero and 50 centimetres. Access to the orebody is from surface.The open pit mining method is considered appropriate, and will comprise conventional truck and shovel.

· Pit slope angles have been determined based on independent geotechnical investigation taking into account geological structure, rock type and design orientation parameters. The overall pit slope angle is 38 degrees containing an average bench angle of 58 degree.

· Based on the geotechnical findings further to the independent report by CQA, the overall pit slope angle is maximum 38degrees, berm width 6 metres and after each 5 benches (50 metre height), a catch bench of 10 metre width should be considered for the open pit design.

· Mining dilution used in the Datamine NPV Scheduler software for reserve estimation is 5%.

· Ore mining recovery factor used in the Datamine NPV Scheduler software for reserve estimation is 95%.

· A minimum mining width of 20m has been used.

· The total tonnage of inferred material in the final pit design was 87,100 tonnes which represents about 2.37% of total ore tonnage in the pit and contains 0.76% (1,134 ounces) of contained gold in the pit.

· The inferred material was excluded from economic model in NPV Scheduler so it had no impact on the total reserve.

· Infrastructure required for the open pit mining method include haul road access (completed to the mine area), offices for geology/mining department, mining workshop, fuel storage, weighbridge and medical/HSEC facilities. Explosives will be transported from another mine operating within the contract area.

Metallurgical factors or assumptions

· The metallurgical process proposed and the appropriateness of that process to the style of mineralisation.

· Whether the metallurgical process is well-tested technology or novel in nature.

· The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied.

· Any assumptions or allowances made for deleterious elements.

· The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole.

· For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?

· The proposed metallurgical processes are well tested being processing facilities of current mining operations in the contract area. The processing facilities include agitation leach by conventional methods, crushed heap leach, and run-of-mine dump leach. AGL process comprises comminution (crushing and grinding), Knelsen concentration, thickening, agitation leaching, resin-in-pulp extraction, and elution and electrowinning to produce gold dore. The final product will be shipped off site for refining. Tails from the process will be transferred via gravity pipeline to the existing tailings management facility (TMF) that has enough capacity to manage the ore from the Ugur deposit.

· The processing algorithm is shown via the pdf link at the end of the Press Release.

· Metallurgical testwork has been conducted in the form of bottle roll testing and column leach tests. The amount of testwork is considered representative of the processing technology to be employed.

· Deleterious elements were not detected in analytical tests and assaying utilised for the resource estimate.

· No pilot scale testwork has been conducted. However, given the nature of the ore type and its close relationship with existing ore bodies being processed, the metallurgical testwork carried out is considered representative of the orebody as a whole.

· The ore reserve estimation has been based on the appropriate mineralogy to meet the specification.

Environmen-tal

· The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.

· Previous ESIA (Environmental Social Impact Assessment) has been carried out by Amec Foster Wheeler(2012) and TexEkoMarkazMMC (2012) (submitted to Government authorities). The Ugur deposit is located within the Gedabek Contract Area for which the ESIA is valid, hence the most recent ESIA is applicable to Ugur. Processing and tailings storage reported in the ESIA is the same as will be utilised for Ugur ores.

· Environmental and geotechnical consultants, CQA International Ltd of the UK (CQA), have on-site representation, and carried out both geotechnical and environmental assessments of the Ugur mine area. Baseline environmental monitoring has been carried out on receptors downstream of the mine site, due to an additional catchment being located in the vicinity of the Ugur mine.

· The waste rock has a low potential for acid rock drainage due to the absence of sulphide bearing mineralisation. Watercourses downstream of stockpiles will be monitored on a routine basis for pH and heavy metals.

· A topsoil management plan is in place, that has been reviewed by a CQA consultant deemed in accordance with the storage principles of the Ministry of Ecology and Natural Resources of the Republic of Azerbaijan and European Union (EU) guidelines. Topsoil removal will take place in August 2017, and be stockpiled in a dedicated locationwith specific design parameters. Stockpiling of materials will be carried out following the soil management plan.

· A stockpile area for waste rock has been identified following condemnation drilling verifying the absence of mineralisation beneath the proposed stockpile. The top soil at the planned site will be removed, and the hill terraced to "key" in the waste dump for maximum stability.

· The tailings management facility (TMF) has the capability for the additional storage requirements for Ugur process waste. The design and operations of the TMF have been reviewed by CQA along with a visit by the Ministry of Ecology and Natural Resources of the Republic of Azerbaijan. Regular environmental monitoring is carried out at the TMF, along with monitoring all receptors associated with the TMF.

· All approvals for conducting the mining fall under the management "PSA" agreement.

Infrastructure

· The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.

· Infrastructure is considered excellent to the deposit. The deposit is located within the Company's contract/licence area with extraction rights according to the Government contract. Ore can be processed at the Company's current facilities, with ore being delivered by truck from the mine to processing via the newly constructed haul road over a distance of about 6 kilometres. Land availability for the mine and associated infrastructure is approved. Offices and mechanical workshop buildings are available within the company and will be relocated to Ugur. Power for the offices and weighbridge will be initially via diesel generators, although solar power is also under consideration. Labour is readily available as the operation is relatively small and only additional mine site labour will be required. G&A and process labour are part of the existing company compliment of staff. Regarding accommodation, canteen facilities and associated services, the Ugur deposit can be considered a "satellite" deposit to the current mining operations and will be serviced by the current infrastructure.

Costs

· The derivation of, or assumptions made, regarding projected capital costs in the study.

· The methodology used to estimate operating costs.

· Allowances made for the content of deleterious elements.

· The derivation of assumptions made of metal or commodity price(s), for the principal minerals and co- products.

· The source of exchange rates used in the study.

· Derivation of transportation charges.

· The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.

· The allowances made for royalties payable, both Government and private.

· Project capital costs are "minimal" given that no processing facilities or manpower camps are required. The costs in relations to the facilities already referenced above are based on actual quotations and capital construction experience at the licence area and sustaining capital projects are based on operational experience locally.

· Operating costs are estimated based on current mining and processing operations within the licence area, as the processing will be carried out at the same plants, and the mining contract and haulage costs are the same as current contracts.

· No allowances have been made for deleterious elements.

· Commodity pricing is based on forecasts by reputable market analysts.

· Local Azeri exchange rates are pegged to the United States $. The source of exchange rates used in the study is the Central Bank of the Republic of Azerbaijan.

· Transportation charges are based on current contracts that will be extended to include haulage of ore from Ugur deposit to the processing facilities. All other transport costs will be per the current contracts for the operating mines.

· Treatment and refining costs are based on current contracts, as the ore will be treated in the operating processing plants and refined under the current agreement.

· Royalties have been considered as part of the cost structure for the company to operate under the Government Contract.

· The estimated operating costs per tonne used in NPV Scheduler are:

Parameters used in NPV Scheduler
Processing cost (includes G&A)
per tonne of ore
AGL	$ 29.22
HL Crushed	$ 6.37
HL_ROM	$ 5.22
Other costs
Total G&A	$ 3.22
Mining cost	$ 1.75
Haulage cost (per tonne km)	Manat 0.1

Revenue factors

· The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.

· The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.

· Revenue is based on the US$ gold price and US$ silver price.

· The price of gold in the reserve model is $1250 per troy ounce and the price of silver in the reserve model is $18.66 per troy ounce.

Market assessment

· The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future.

· A customer and competitor analysis along with the identification of likely market windows for the product.

· Price and volume forecasts and the basis for these forecasts.

· For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract.

· The market for gold and silver is well established. The metal price is fixed externally to the Company, however, the Company has reviewed a number of metal forecast documents from reputable analysts and is comfortable with the market supply and demand situation.

· A specific study of customer and competitor analysis has not been completed as part of this project.

· Price and volume forecasts have been studied in reports from reputable analysts, based on metal supply and demand, US$ forecasts and global economics.

· Industrial minerals do not form part of this study.

Economic

· The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.

· NPV ranges and sensitivity to variations in the significant assumptions and inputs.

· Prices for gold and silver used in NPV Scheduler are:

Gold: $41.19 per gramme

Silver: $6.00 per gramme

· Processing Recovery (for gold / silver) %

Agitation Leach 90% / 66%

Crushed Heap Leach 70% / 7%

Run-of-mine (ROM) 40% / 7%

· Costs used in NPV are show below:

Parameters used in NPV Scheduler
Processing cost (includes G&A)
per tonne of ore
AGL	$ 29.22
HL Crushed	$ 6.37
HL_ROM	$ 5.22
Other costs
Total G&A	$ 3.22
Mining cost	$ 1.75
Haulage cost (per tonne km)	Manat 0.1

Selling Cost %0.05 of revenue of Gold

Selling Cost %0 of revenue of Silver

· Sensitivity analysis has been used at a range of gold prices.

Social

· The status of agreements with key stakeholders and matters leading to social licence to operate.

· To the best of the Competent Person's knowledge, agreements with key stakeholders and matters leading to social licence to operate are valid and in place.

Other

· To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves:

· Any identified material naturally occurring risks.

· The status of material legal agreements and marketing arrangements.

· The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.

· There are no material naturally occurring risk associated with theOre Reserves.

· Anglo Asian Mining plc is currently compliant with all legal and regulatory agreements, and marketing arrangements.

· The project is located within a current contract area that is managed under a "PSA" production sharing agreement.

· The PSA is valid for the forecast life of mine.

Classification

· The basis for the classification of the Ore Reserves into varying confidence categories.

· Whether the result appropriately reflects the Competent Person's view of the deposit.

· The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).

· Measured Mineral Resources have been converted to Proved Reserves after applying the modifying factors.

· Indicated Mineral Resources have been converted to Probable Ore Reserves after applying modifying factor.

· The resultant Ore Reserves are appropriate given the level of understanding of the deposit geology and reflects the Competent Person's view of the deposit.

· The inferred material was excluded from economic model in NPV Scheduler so it had no impact on the total reserve, and no Probable Ore Reserves have been derived from Measured Mineral Resources.

Audits or reviews

· The results of any audits or reviews of Ore Reserve estimates.

· Datamine company developed and audited the Mineral Resource and Mineral Reserve block models. Two Datamine engineers worked on the resources and reserves and were able to verify work and procedure.

· Internal company and external reviews of the Ore Reserves yield estimates that are consistent with the Ore Reserve results. The in-situ Ore Reserves classified by process type is presented below:

Ore Reserves (Process & Class)	Tonnage (Mt)	Gold Grade (g/t)	Silver Grade (g/t)	Gold ('000 ounces)	Silver ('000 ounces)
Proved-AGL	1,604,200	1.94	10.26	99.99	529.06
Proved-HLC	1,261,813	0.84	4.95	34.22	200.74
Proved-ROM	504,400	0.48	3.05	7.85	49.45
Total Proven	3,370,413	1.31	7.19	142.06	779.25
Probable-AGL	23,238	1.42	5.12	1.06	3.83
Probable-HLC	120,413	0.80	4.56	3.12	17.65
Probable-ROM	71,988	0.47	3.10	1.09	7.16
Total Probable	215,639	0.76	4.13	5.27	28.64
Proved+Probable	3,586,052	1.28	7.01	147.33	87.89

· The reference point for the Ore Reserve is where the ore is delivered to the processing plant.

· The amount of waste material calculated inside the pit shell is about 3.05 million tonnes, resulting in a strip ratio (ore:waste) of 1:0.83.

Discussion of relative accuracy/ confidence

· Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate.

· Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage.

· It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

· The Ore Reserve has been completed feasibility standard with the data being generated from a tightly spaced drilling grid, thus confidence in the resultant figures is considered high.

· Extraction of ore from the Ugur deposit will commence in August 2017, and processing of the ores will commence in September 2017. As on date of this release, top soil pre-strip has commenced.

· Mining costs and haulage costs will be as per the current contracts in place being utilised at other mines in the contract area.

· Project capital is well managed, and certain infrastructure facilities are available from with the Anglo Asian Mining group, thus minimizing capital requirements.

· The global Mineral Resource estimates have been estimated by using a sectional (polygonal) method, and by 3D modelling using both inverse distance and kriging methods. All results are within 5% of each other.

· The Modifying Factors for mining, processing, metallurgical, infrastructure, economic, gold price, legal, environmental, social and governmental factors as referenced above have been applied to the pit design and Ore Reserves calculation on a global scale and data reflects the global assumptions.

· No mine production data is available at this stage for reconciliation and/or comparative purposes.

Section 5 Estimation and Reporting of Diamonds and Other Gemstones

(Criteria listed in other relevant sections also apply to this section. Additional guidelines are available in the 'Guidelines for the Reporting of Diamond Exploration Results' issued by the Diamond Exploration Best Practices Committee established by the Canadian Institute of Mining, Metallurgy and Petroleum.)

Estimation and Reporting of Diamonds and Other Gemstones in not applicable to this Statement of Resources and Reserves

APPENDIX 2

GLOSSARY AND OTHER INFORMATION

1. GLOSSARY OF JORC CODE TERMS

The following definitions are extracted from the JORC Code, 2012 Edition

Cut-off grade	The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification.
Indicated Mineral Resource	An 'Indicated Mineral Resource' is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to assume geological and grade (or quality) continuity between points of observation where data and samples are gathered. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Ore Reserve.
Inferred Mineral Resource	An 'Inferred Mineral Resource' is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to an Ore Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
JORC	JORC stands for Australasian Joint Ore Reserves Committee (JORC). The Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) is widely accepted as the definitive standard for the reporting of a company's resources and reserves. The latest JORC Code is the 2012 Edition.
Measured Mineral Resource	A 'Measured Mineral Resource' is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to confirm geological and grade (or quality) continuity between points of observation where data and samples are gathered. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proved Ore Reserve or under certain circumstances to a Probable Ore Reserve
Mineral Reserves or Ore Reserves	An 'Ore Reserve' is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified.
Mineral Resource	A 'Mineral Resource' is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
Modifying Factors	'Modifying Factors' are considerations used to convert Mineral Resources to Ore Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.
Probable Ore Reserve	A 'Probable Ore Reserve' is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Ore Reserve is lower than that applying to a Proved Ore Reserve.
Proved Ore Reserve	A 'Proved Ore Reserve' is the economically mineable part of a Measured Mineral Resource. A Proved Ore Reserve implies a high degree of confidence in the Modifying Factors.

2. GLOSSARY OF ABBREVIATIONS

Abbreviation	Definition of term
Ag	Chemical symbol for silver
Au	Chemical symbol for gold
g/t	Gramme per tonne
M	Meters
Oz	Ounces
t	Tonnes

3. SOFTWARE USED IN THE MINERAL RESOUCE AND RESERVES ESTIMATE

"Datamine Studio RM" and "NPV Scheduler"software was used in the estimate of Mineral Resources and the calculation of Ore Reserves.

"NPV Scheduler" is computer software that uses the Lerch-Grossman algorithm, which is a 3-D algorithm that can be applied to the optimisation of open-pit mine designs. The purpose of optimisation is to produce the most cost effective and most profitable open-pit design from a resource block model to define the reserve.

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCLLFFSTRILLID

Companies

Anglo Asian Mining (AAZ)

Thursday, 21st November 2024

COMPANIES COVERED:

HLMA JD. ITH

JD Sports tanks after management tighten profit guidance towards the lower end of expectations, Halma finds support from strong earnings and capital return commitment cheers shareholders in Ithica Energy.

Full Archive

UK 100

Latest directors dealings

40 minutes ago Alphawave IP Group
1 hour ago WH Smith
1 hour ago Staffline Group
2 hours ago Manchester & London Investment Trust
2 hours ago Associated British Foods

All directors dealings today