RNS Number : 2303U

Anglo Asian Mining PLC

27 March 2023

27 March 2023

Anglo Asian Mining plc

300,000 plus tonnes of copper defined at Garadag

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer primarily focused in Azerbaijan, is pleased to announce that an initial assessment of data relating to the Garadag porphyry copper deposit (the "Garadag Deposit") confirms the potential to produce over 300,000 tonnes of copper.

Anglo Asian acquired historic geological data from AzerGold CJSC (the "Data") relating to the Garadag Deposit, which is hosted within the Garadag contract area and located north of the Company's Gedabek and Xarxar contract areas.

This initial assessment by the Company has not been prepared according to the JORC Standard. The Company intends to prepare a mineral resource estimate using the JORC procedures on completion of the evaluation programme, targeting mid-2024 for the preparation of the mineral resource estimate according to the JORC code.

Stephen Westhead, Vice-President of Anglo Asian, commented:

"Garadag hosts very significant quantities of copper. It has the potential to meaningfully increase our production profile and alone provides us with considerable copper mineralisation. It is an important addition to the Company's growing portfolio of copper assets.

"While only a preliminary assessment, we are incredibly excited by Garadag's development potential, and believe it can produce between 20,000 to 25,000 tonnes of copper per annum. We are currently conducting further validation processes to provide additional confidence, including producing a JORC-compliant mineral resource estimate."

The Garadag contract area

The Garadag contract area (Figure 1), which was granted to the Company in July 2022, has an area of 344 square kilometres and is located 16 kilometres to the north-north-east of the Gedabek processing facilities. In August 2022, the Company acquired drill core, assays and other data about Garadag and the nearby Xarxar mineral occurrence from AzerGold CJSC. The Data include historical drilling results from exploration carried out during the Soviet era, as well as more modern work undertaken by the two previous owners of Garadag, namely Aimroc Ltd. and, most recently, AzerGold CJSC. The roads built for drill access are accessible and serviceable on Garadag (Figure 2).

Figure 1: Garadag and adjacent contract area boundaries of Anglo Asian showing the position of ongoing projects (source: Google Earth).

The Data

A summary of the drill hole results in the Data is tabulated below:

                                                        Total       Number 
                        Number of drill holes           length     of samples 
 Drilling                                      Total 
  Period          Adit   Vertical   Inclined           (metres)    (metres) 
                 -----  ---------  ---------  ------  ---------  ------------ 
 Soviet                    129                  129     35,140      13,776 
                 -----  ---------  ---------  ------  ---------  ------------ 
 Soviet adit       5                             5      2,055         953 
                 -----  ---------  ---------  ------  ---------  ------------ 
 Aimroc                     12         3        15      7,206        6,887 
                 -----  ---------  ---------  ------  ---------  ------------ 
 AzerGold CJSC             108         16       124     23,454       8,199 
                 -----  ---------  ---------  ------  ---------  ------------ 
 Total             5       249         19       273     67,855      29,815 
===============  =====  =========  =========  ======  =========  ============ 

The 23,454 metres of drill core and core samples of the AzerGold CJSC drill campaign have all been transferred to Anglo Asian.

Figure 2: The Garadag deposit location

In addition to drill hole and assay data, Anglo Asian also received the following data and information: Soviet era and Azerbaijan exploration geological maps; geophysics (induced polarisation "IP" and magnetic) survey data; and preliminary three-dimensional geological models. Various technical reports were also received, which are listed in Appendix one.

Mineral resources of the Garadag Deposit

The first mineral resource estimate of the Garadag Deposit was produced during the Soviet era dated 01 January 1992. It contained over 318,000 tonnes of copper under the Soviet Standard of resource classification and is tabulated below:

                                                 Copper content 
                          Unit           Category   Category   Total C1 
                                            C1         C2       and C2 
                  --------------------  ---------  ---------  --------- 
 Ore               Millions of tonnes     25.35      23.69      49.04 
                  --------------------  ---------  ---------  --------- 
                      Thousands of 
 Copper content           tonnes           168       150.7      318.7 
                  --------------------  ---------  ---------  --------- 
 Grade                  Per cent.          0.65       0.64       0.64 
                  --------------------  ---------  ---------  --------- 

AzerGold CJSC contracted with various international consultancies to work on the mineral resource estimation, in-pit resources and metallurgical testwork. All AzerGold CJSC samples were assayed and analysed by the international group, ALS. AMC Consultants PTY Ltd ("AMC") provided resource estimation services and Bureau Veritas Minerals PTY Ltd ("BV") were commissioned to carry out metallurgical testwork.

AMC prepared a Garadag pit optimisation and design study in February 2020 and developed two open pit scenarios, one mining over 43 million tonnes of ore (containing 163,000 tonnes of copper) over a 9 year period and the other mining over 90 million tonnes of ore (containing 307,000 tonnes of copper) over an 18 year period. These results partially confirmed the presence of over 300,000 tonnes of in-situ copper within an open pit shell.

Anglo Asian carried out mineral resource estimation based on geostatistical techniques and three-dimensional modelling on data received from AzerGold CJSC, constrained by the larger of the AMC pit shells (referenced in the paragraph above). This showed an "Indicated" plus "Inferred" mineral resource of over 66.3 million tonnes of ore at 0.49 per cent. copper, containing some 324,688 tonnes of copper, which further confirmed the copper potential of the Garadag Deposit. The database developed by Anglo Asian needs to be fully validated and further check drilling and confirmation of data will be carried out. The Company's preliminary mineral resource estimate, although utilising geostatistical methods according to JORC guidelines, requires further work to satisfy the JORC Standard requirements and is therefore not prepared to JORC Standard. The Company intends to prepare a mineral resource estimate to the JORC Standard on completion of the evaluation programme.

The Company carried out further mineralisation modelling within a 0.1 per cent. copper shell to determine the full potential of the Garadag deposit. The amount of mineralisation, resultant copper per cent. and contained copper were estimated using a range of cut-off grades. The results are tabulated below.

Grade-tonnage relationship results above elevation of 1,000 metres level

(average depth from surface 500 metres)

 Cut-off   Mineralisation   Resultant       Metal 
  (Cu %)      (tonnes)       Grade (Cu    (Cu tonnes) 
  0.10      728,060,777        0.25       1,820,152 
          ---------------  -----------  ------------- 
  0.20      406,595,477        0.33       1,341,765 
          ---------------  -----------  ------------- 
  0.30      191,070,264        0.43        821,602 
          ---------------  -----------  ------------- 
  0.40       88,776,513        0.54        479,393 
          ---------------  -----------  ------------- 
  0.50       43,706,000        0.65        284,089 
          ---------------  -----------  ------------- 

Note: Resources estimated based on a 2.6 grammes per tonne specific gravity applied for all blocks.

Assuming a 0.3 per cent. copper cut-off, the resultant mineral resource is 191 million tonnes grading 0.43 per cent. copper that hosts 821 thousand tonnes of copper. A target to extract 500,000 tonnes of copper (61 per cent. of the 821,000 tonnes contained copper) would result in a tonnage of 100 million tonnes of ore at 0.5 per cent. copper. At a mining rate of 7 million tonnes per annum, this would give a 14 year mine life. 35,000 tonnes of copper per annum could be extracted over the 14 year mine life, which at a 65 per cent. processing recovery, would deliver production of 22,750 tonnes of copper per annum. A long section showing the extent of mineralisation at Garadag is shown in Figure 3.

Figure 3: Long section of the Garadag Deposit showing drill hole traces

Ongoing studies by Anglo Asian

As part of the initial validation of the Data by Anglo Asian, five AzerGold CJSC drill cores with a total length of 1,305 metres were geologically logged and 815 core samples were assayed. Based on this new geological logging, the mineralisation at Garadag has been classified into "leached zone", "oxide zone", "enrichment zone", "transition zone", and "primary zone" (Figure 4 below). This will further assist the geometallurgical approach for process selection.

Figure 4: Schematic cross-section through part of Garadag Deposit showing mineral zonation

Assay and analysis data from ALS is being used to determine geochemical signatures from rock and alteration geochemistry with work carried out by Anglo Asian and specialists of the Natural History Museum of London. Work includes identifying the geochemical domains and 'ore' mineralogical domains within the database, assessing mineral geochemistry, exploring the possibility of developing algorithms for the classification of the lithological 'ore' mineral and alteration domains, and identifying intersections where further mineralogical assessment is required. This work will assist our understanding of the future potential of the deposit.

Next steps in evaluation of the Data

All data will be transferred to the new database being developed by the Company and checked and validated to ensure the information is correct. High resolution photography and check logging or geological relogging of all 23,454 metres of drill core will be carried out to ensure consistency of geological description and identification of features consistent with porphyry modelling. All core and sample photographs will be compiled into a digital data set as a sub-group of the main database.

A full mining assessment will be made to determine the likely best options for extraction, which will involve the following stages:

(i) Previous models of extractable mineralisation have been based on open pit methods. However, an underground mining method trade-off study will be carried out to assess the economics of underground mining. This will enable preparation of the optimum mining plan for a combined open pit and underground mine. This will then be compared to the alternative approach of utilising in-situ recovery methods.

(ii) Various geological techniques will be employed to understand the geometallurgical properties of the deposit for mine development. In parallel, planning for an environmental assessment and administration of the site are underway.

(iii) In-house petrological-mineralogical studies will be utilised for metallurgical work planning.

(iv) Reverse circulation drilling will be used for exploration and near surface sampling, while core drilling will be deployed for exploration, resource infill drilling, check or twin drilling, metallurgical, geotechnical, and hydro-geological data acquisition. The Company is also investigating the option of core scanning and hyper-spectral scanning.

The Garadag contract area also hosts four other known mineralisation targets named as "Moruglu", "Gochdere", and "Seyidler" (Figure1) plus "Ashaqi Cayir" and "Yuxari Cayir" collectively known as "Jaghirchay" near Garadag (Figure 5). The length of the target zone adjacent to and including Garadag for exploration is 9.8 kilometres (Figure 5).

Figure 5: Copper mineralisation potential over a length of 9.8 kilometres

Processing of ores from the Garadag Deposit

Production rates from Garadag, combined with Xarxar, could exceed 30,000 to 35,000 tonnes of copper per annum from a dedicated processing facility constructed for the Xarxar and Garadag mines. It will be separate from the current processing facilities at Gedabek.

Copper ores are typically processed by flotation, which generally gives a higher recovery than heap leaching. However, flotation produces a concentrate, which requires smelting and refining to produce saleable copper metal, and a proportion of its copper content is retained by its purchaser ('Offtaker'). Flotation also requires the construction of a tailings dam. The Company is therefore studying other methods of processing to maximise copper production and revenue:

-- Heap leaching of the oxides and transition ores, followed by solvent extraction and electro-winning to produce cathode copper metal. No tailings dam is required for this process.

   --        Bacterial leaching of the sulphide copper ores 

Each of the various methods has a different profile of costs and revenues and the Company is currently evaluating them to determine which is optimal. In-situ recovery is another approach which is also being considered.

Appendix One

Technical reports received as part of the AzerGold CJSC data package (the Data)

 Reports   Topic                                 Report name 
 Reports                    "Environmental impact assessment project 
           Ecology           of exploration works in Garadag ore deposit" 
--------  ---------------  ------------------------------------------------------- 
                            "Technical Report on the result of the 
                             geological exploration works carried out 
           Geology           in the Garadag contract area" 
--------  ---------------  ------------------------------------------------------- 
                            "Interpretation of IP/Resistivity Survey, 
                             Khar Khar Area, Azerbaijan" (outside of 
           Geophysics        deposit) 
          ---------------  ------------------------------------------------------- 
                            "Environment baseline assessment Garadag, 
           Ecology           Kharkhar and Jayirchay copper deposits" 
          ---------------  ------------------------------------------------------- 
                            Report on the results of the geological 
                             and geophysics work conducted according 
                             to Annex No. 2 of the contract "On the 
                             execution of geophysical surveys in the 
           Geology           Kharkhar region" (outside of deposit) 
          ---------------  ------------------------------------------------------- 
                            "Technological characteristics of the Garadag 
           Metallurgy        ore deposit" (short) 
          ---------------  ------------------------------------------------------- 
                            "Preliminary interpretation of lithogeochemistry 
           Lithochemistry    in the Djagirchay area, Garadakh ore district"(short) 
--------  ---------------  ------------------------------------------------------- 


 "A, B, C1 and                 Categories of ore body defined under the Russian 
  C2"                           Standard as having met minimum requirements of exploration 
                                information and knowledge; 
 "Assay"                       Measure of valuable mineral content; 
 "Bacterial leaching"          A process that extracts valuable metals from a low-grade 
                                ore with the help of microorganisms; 
 "Core"                        A solid, cylindrical sample of rock typically produced 
                                by a rotating drill bit, but sometimes cut by percussive 
 "Cu"                          Copper; 
 "Cut-off grade"               Grade of a commodity, measured as an amount per 
                                unit mass, used to delineate the outer limits of 
                                a proposed ore body; 
 "Drillhole"                   Technically, a circular hole drilled by forces applied 
                                percussively and/or by rotation; loosely and commonly, 
                                the name applies to a circular hole drilled in any 
 "Drilling"                    The operation of making deep holes with a drill 
                                for prospecting, exploration, or valuation; 
 "Enrichment zone"             A mineral deposition process in which near-surface 
                                oxidation produces acidic solutions that leach metals, 
                                carry them downward, and reprecipitate them; 
 "Flotation"                   A method used to separate and concentrate ores by 
                                altering their surfaces to a hydrophobic or hydrophilic 
 "g"                           Grammes; 
 "g/t"                         Grammes per tonne; 
 "Geological logging"          A written and/or graphic record of the geologic 
                                data obtained from drillhole core and/or cuttings; 
 "Geostatistical               The interpretation of mineralisation and geology 
  methods"                      that controls mineralisation; 
 "Grade"                       The relative quantity or the percentage of ore-mineral 
                                or metal content in an orebody; 
 "Hydro-geological"            A study of the occurrence, distribution, quality 
                                movement of the shallow most groundwater of the 
                                state and the potential impact of wastewaters on 
                                the groundwater; 
 "Indicated Resource"          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; 
 "Induced polarisation"        A ground-based geophysical survey technique measuring 
                                the intensity of an induced electric current, used 
                                to identify disseminated sulphide deposits; 
 "Inferred Resource"           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 
 "JORC"                        The Australasian Code for Reporting of Exploration 
                                Results, Mineral Resources and Ore Reserves, as 
                                published by the Joint Ore Reserves Committee of 
                                The Australasian Institute of Mining and Metallurgy, 
                                Australian Institute of Geoscientists and Minerals 
                                Council of Australia; 
 "JORC (2012)"                 The 2012 edition of the JORC code; 
 "Leaching"                    The separation, selective removal or dissolving-out 
                                of soluble constituents from a rock or ore body 
                                by the natural actions of percolating solutions; 
 "m"                           Metre; 
 "Mineral Resource"            A concentration or occurrence of material of economic 
                                interest in or on the earth's crust in such form 
                                and quantity that there are reasonable and realistic 
                                prospects for eventual economic extraction. The 
                                location, quantity, grade, continuity, and other 
                                geological characteristics of a Mineral Resource 
                                are known, estimated from specific geological evidence 
                                and knowledge, or interpreted from a well-constrained 
                                and portrayed geological model; 
 "Mineralisation"              The process by which minerals are introduced into 
                                a rock. More generally, a term applied to accumulations 
                                of economic or related minerals in quantities ranging 
                                from weakly anomalous to economically recoverable; 
 "MRE"                         Mineral Resource Estimate; 
 "Mt"                          Million tonnes; 
 "Open pit mining"             Mining of a deposit from a pit open to surface and 
                                usually carried out by stripping overburden materials; 
 "Ore"                         The naturally occurring material from which a mineral 
                                or minerals of economic value can be extracted profitably 
                                or to satisfy social or political objectives. The 
                                term is generally but not always used to refer to 
                                metalliferous material, and is often modified by 
                                the names of the valuable constituent; 
 "Ore reserves"                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; 
 "Oxidation"                   A chemical reaction caused by exposure to oxygen 
                                that results in a change in the chemical composition 
                                of a mineral; 
 "Oxide zone"                  The uppermost layer of a mineral deposit that has 
                                been exposed to oxygen in the atmosphere or near-surface 
 "Petrological-mineralogical   The study of rocks and the processes that form and 
  studies"                      transform them and the crystal structure and physical 
                                properties of the mineral constituents of rocks; 
 "Pit optimisation"            Analysis conducted to determine the most profitable 
                                open pit design; 
 "Primary zone"                The area of minerals deposited during the original 
                                period or periods of mineralisation containing unaltered 
                                primary minerals; 
 "Recovery Rate"               A term used in process metallurgy to indicate the 
                                proportion of valuable material obtained in the 
                                processing of an ore. It is generally stated as 
                                a percentage of the material recovered compared 
                                to the total material present; 
 "Russian Standard"            Referring to the Gosstandart of Russia, the national 
                                Russian standard on mining and minerals as published 
                                by the National Certification Body of the Russian 
                                Federation and adhered to by GKZ and Rosnedra; 
 "Tailings dam"                An earth-fill embankment dam used to store byproducts 
                                of mining operations after separating the ore from 
                                the gangue; 
 "Transition zone"             The broken, weathered zone between the subsoil and 
                                competent, unaltered bedrock. 

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, which was incorporated into UK law by the European Union (Withdrawal) Act 2018, until the release of this announcement.

All references to "$" are to United States dollars.

For further information please contact:

 Anglo Asian Mining plc 
                                             Tel: +994 12 596 
 Reza Vaziri, Chief Executive Officer         3350 
                                             Tel: +994 502 910 
 Bill Morgan, Chief Financial Officer         400 
                                             Tel: +994 502 916 
 Stephen Westhead, Vice President             894 
 SP Angel Corporate Finance LLP (Nominated   Tel: +44 (0) 20 
  Adviser and Broker)                         3470 0470 
  Ewan Leggat 
  Adam Cowl 
 Hudson Sandler (Financial PR)               Tel: +44 0) 20 7796 
  Charlie Jack                                4133 
  Harry Griffiths 

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 Vice-President, who is a Fellow of The Geological Society of London, a Chartered Geologist, Fellow of the Society of Economic Geologists, Fellow 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 mineral resources included in this announcement. For the avoidance of doubt, resources and economically extractable copper figures in this notification are not based on a Standard for the reporting of reserves and resources, such as JORC, as defined in the AIM Rules for Companies.

About Anglo Asian Mining

Anglo Asian Mining plc (AIM:AAZ) is a gold, copper and silver producer in south-west Asia with a broad portfolio of production and exploration assets in Azerbaijan. The Company produced 57,618 gold equivalent ounces ("GEOs") for the year ended 31 December 2022.

In December 2021, the Company undertook a private placement which acquired 19.8 per cent. of Libero Copper & Gold Corporation ("Libero"). Libero is listed on the TSX Venture Exchange in Canada and owns, or has the option to acquire, several copper exploration properties in North and South America, including Mocoa in Colombia, one of the world's largest undeveloped copper-molybdenum resources. Two further follow-on investments have been made in Libero to maintain the Company's shareholding at 19.8 per cent.

On 5 July 2022, the Parliament of Azerbaijan ratified amendments to the Company's Production Sharing Agreement, which granted it legal title to three additional concessions with a combined area of 882 square kilometres, including the Garadag porphyry copper deposit, with a Soviet classified resource of over 300,000 tonnes of copper. https://www.angloasianmining.com/

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