Record Gold Production Q3 2013 - Gedabek

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

10 October 2013

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

Record Gold Production of 20,242 ounces for Q3 2013 at Flagship Gedabek Gold/Copper/Silver Mine in Azerbaijan

Anglo Asian Mining plc, the AIM listed gold producer in Azerbaijan, announces record gold production at its flagship Gedabek gold/copper/silver mine ('Gedabek') in western Azerbaijan, for the three months to 30 September 2013 ('Q3 2013').

Overview

·    Record quarterly gold production of 20,242 ounces for Q3 2013 from Gedabek, as a result of the new Agitation Leaching Plant commissioned in June 2013 to improve gold recoveries

·    Gedabek gold production for first nine months of 2013 totals 37,700 ounces

·    The target for Q4 2013 is to produce >22,300 ounces and produce 60,000 ounces for FY 2013 (a circa 20% increase on FY 2012 gold production of 50,125 ounces)

·    Q3 2013 gold sales of 19,402 ounces at an average price of US$1,328 per ounce

·    On track to lower operating costs of Gedabek to US$450-500 per ounce by end of FY 2013

·    Copper, silver and gold production from SART processing operations at Gedabek for Q3 2013 totalled 112 tonnes of copper, 20,166 ounces of silver and 4.5 ounces of gold

·    Copper sales of 720 wet metric tonnes of copper concentrate realised US$1.4 million of revenue

·    Cash position of US$6.2 million

·    Net debt, being interest-bearing loans and borrowings less cash and cash equivalents, totals US$41.5 million

Anglo Asian CEO Reza Vaziri said, "Our record quarterly gold production at Gedabek is a significant achievement and highlights the sound investment we made in building and commissioning our new Agitation Leaching Plant in June this year. We have seen a substantial step change in our production efficiency since the new plant came on line, indeed our Q3 2013 record gold production of 20,242 ounces was higher than that of our H1 2013 production of 17,497, and we expect to see this trend continue as we look to achieve 60,000 ounces of gold production for the current financial year. Not only will the Agitation Leaching Plant increase production, but it will help to lower cash costs of Gedabek too. We have already seen this in its first few months of operation and we believe cash costs per ounce will reach US$450-500, which on an industry peer comparison places our costs in the lower quartile of cash efficient operations.

"Furthermore with US$6 million in the bank, and a second gold development project Gosha due to commence full production in 2014, we are ideally placed to deliver on our strategy of increasing our production profile and profitability to deliver enhanced value to shareholders."

Full Details

During Q3 2013, the Company produced 20,242 ounces of gold ('Au') at Gedabek, which is a record in terms of quarterly production since the mine first commenced production in May 2009.  Of this, 6,104 ounces were produced from Gedabek's heap leach operations and 14,138 ounces from the new Agitation Leaching Plant which was commissioned in June 2013.  Anglo Asian has completed gold sales* for the period of 19,402 ounces of gold at an average of US$1,328 per ounce (Q2 2013: US$1,438).  The FY 2013 gold production target remains at 60,000 ounces, a circa 20% increase to that of FY 2012 (50,125oz).

The following summary table of gold production and prices outlines quarter-on-quarter gold production at Gedabek for the past year. 

As previously reported the Company's Agitation Leaching Plant, built to improve gold recovery and production at Gedabek, was successfully commissioned in June 2013, US$7 million under budget at US$45 million.  In its first three months of operation, total crushed ore was 176,000 tonnes with gold recovery levels reaching 82% by September, contributing to the 20,242 ounces of gold for the quarter. The plant is expected to improve the gold recoveries of both oxide and sulphide ores at Gedabek to levels of 85% and 69%, respectively and has been designed to initially treat 100 tonnes of ore per hour.

In turn, Gedabek's heap leach stacking operation continued to perform in line with management's expectation in Q3 2013.  The Company transferred 122,841 tonnes of dry ore onto the leach pad with an average gold content of 1.2 g/t (Q2 2013: 200,658 tonnes).

In terms of copper concentrate production from the Company's Sulphidisation, Acidification, Recycling, and Thickening ('SART') plant, 112 tonnes of copper, 20,166 ounces of silver and 4.5 ounces of gold was produced.

In terms of copper sales for the period, the Company signed a new sales contract with Seagate Minerals and Metals Inc ('Seagate') for 720 WMT of copper concentrate to be shipped during July and August 2013.  This generated revenues of US$1.4 million for the period.  At the end of Q3 2013 copper concentrate stocks were 393 WMT.  These sales will see Anglo Asian's copper concentrate product continuing to add to its bottom line and increasing its profitability for FY 2013.  In addition, the copper contract sales from Q3 2013 and future sales will contribute to Gedabek's cash costs bottom line to help achieve a reduced operational cash cost of US$450-US$500 per ounce of gold by the end of 2013, in line with the Company's targeted objectives stated for the year.

At the end of Q3 2013 Anglo Asian had a robust cash position of US$6 million. Net debt, being interest bearing loans and borrowings less cash and cash equivalents therefore, stood at US$41.5 million at 30 September 2013.

With regards to the JORC compliant resource update due from Gedabek (see press release 11.09.13), Anglo Asian has received the report from CAE Mining. Final analysis is being conducted by CAE Mining and once final sign off has been received, Anglo Asian will provide a full update with regards to the latest drilling programme and resource update.

**ENDS**

For further information please visit www.angloasianmining.com or contact:

*The Company has a Production Sharing Agreement ('PSA') in place with the Government of Azerbaijan which governs how the production of each of the Company's Contract Areas under the PSA is divided between the Company and the Government of Azerbaijan. Currently, the Company takes ownership of 87.25% of the production at Gedabek, which accounts for the difference between the total gold produced at Gedabek and the amount of gold sold by the Company. It should also be noted that there will always be short-term timing differences between gold production and sales.

Notes:

Anglo Asian Mining plc (AIM:AAZ) is a gold producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan.  The Company has a 1,962 sq km prospective exploration portfolio, assembled from analysis of historic Soviet geological data and held under a Production Sharing Agreement ('PSA') based on the Azeri oil industry.  The Company developed Azerbaijan's first operating gold/copper mine, Gedabek, which commenced gold production in May 2009.  Gold production for the year ended 31 December 2012 totalled 50,215 oz of gold and FY 2013 gold production target is 60,000 oz of gold in line with commissioning of a new agitation leaching plant at Gedabek in H1 2013.

Anglo Asian is actively looking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for other properties in order to fulfil its expansion ambitions and become a mid-tier gold and base metal production company