Significant Oxide Zone Drilled at Ugur Deposit

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

 

16 December 2016

Anglo Asian Mining plc

Significant oxide zone drilled at newly discovered Ugur deposit

 

Anglo Asian Mining plc ("Anglo Asian" or "the Company"), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to announce an exploration update for its new gold discovery, "Ugur", within its Gedabek licence area in western Azerbaijan ("Gedabek Licence").

 

Highlights

 

·   Phase II drilling programme commenced in October 2016 to expand the potential resource at the Gedabek Licence - provides significant potential upside to the Company's future gold production

·    Additional 35 reverse circulation drill holes completed since previous update - 1,842 metres of reverse circulation drilling now completed

·    Core drilling commenced with six drill holes completed totalling 1,221 metres

·    Initial Phase II core drilling programme has now confirmed an oxide zone to depth of about 60 metres

·    Core drilling on-going based on a 40-metre grid system to allow for resource and reserve estimation

·    Detailed geological structural and alteration mapping has started and an additional 240 metres of trenching completed

·    Significant upside potential from results of alteration mapping - core drilling of flanks of main zone planned

 

Anglo Asian CEO, Reza Vaziri, said "These encouraging results from the newly discovered Ugur deposit enhance our understanding of the deposit and show that the oxide zone extends deeper than initially determined by previous drilling. Ugur is only three kilometres from our processing facilities at our main Gedabek site, highlighting the clear strategic value of developing this deposit. Work will continue to expand the potential resource of this new discovery. I look forward to updating shareholders on our progress as we work towards further enhancing our already profitable operation at Gedabek through the mining of multiple zones of mineralisation."

 

Anglo Asian Group Director of Geology, Stephen Westhead, said "With core drilling results having determined a significant oxide zone containing gold, it is planned to continue core drilling on a grid in the central area to allow for three-dimensional modelling for resource and reserve estimation of this exciting prospect. In conjunction with this, we will also drill the flanks of the area targeted by surface alteration mapping to expand the gold potential. We look forward to continuing to evaluate this deposit with a view to adding gold reserves in advance of mining as we aim to enhance our entire production profile for the Gedabek Licence."

 

Background

 

Anglo Asian's in-house exploration group has defined a new mineral occurrence named "Ugur" (meaning "good luck" or "success" in the Azeri language) located three kilometres north-west from its agitation leaching plant and heap leach facilities at its Gedabek Licence. This was defined as part of the on-going exploration programme to assess alteration zones and geological structures along strike from its Gedabek mine.  As previously reported, this programme is designed to expand the Gedabek gold and copper resource.

 

The Ugur deposit area was defined from geological mapping. An alteration zone extends over an area of 1,000 metres (east-north-east by west-south-west) by 500 metres (north-west by south-east).

 

Detailed drill hole results

 

A total of 55 vertical reverse circulation ("RC") drill holes totalling 1,842 metres and six core drill holes totalling 1,221 metres have now been drilled at Ugur from which assay results have been subsequently obtained. The area covered by RC drilling is 600 metres (east-north-east) by 200 metres (north-north-west) within the alteration area, while a central mineralised zone of 225 metres (east-north-east) by 130 metres (north-north-west) has been defined with six core drill holes completed in this area.

 

The Company reported the significant results of RC drilling from the first twenty RC drill holes in its release of 17 October 2016. Subsequent to that release, a further 35 RC drill holes have been completed. Six of the RC drill holes contained significant mineralisation above the cut-off grade of 0.3 grammes per tonne.

 

The results of the six RC drill holes which contained significant mineralisation and the core drill holes one to six are set out in the tables below. These intersections (above 0.3 grammes per tonne) are all located in the oxide zone commencing from surface (unless otherwise stated). The assays returned no significant results for copper.

 

 

Additional Reverse Circulation drill holes since 17 October 2016 release (drill holes 21 to 55)*

 

	Depth of drill hole			Grade
	From	To	Total interval	Gold	Silver
Drill-hole	(metres)	(metres)	(metres)	(g/t)	(g/t)
UGRC21	0.0	8.0	8.0	0.20	1.38
UGRC24	5.0	23.0	18.0	0.19	1.19
UGRC24	23.0	27.0	4.0	0.34	0.75
UGRC24	27.0	34.0	7.0	0.16	0.75
UGRC25	1.0	4.0	3.0	0.34	1.54
UGRC25	4.0	12.0	8.0	0.18	0.86
UGRC25	12.0	19.0	7.0	0.41	1.51
UGRC25A	12.0	14.0	2.0	0.36	0.86
UGRC25A	14.0	19.0	5.0	0.12	0.91
UGRC25A	19.0	24.0	5.0	0.30	1.26
UGRC28	1.0	4.0	3.0	0.31	2.69
UGRC29	2.0	3.0	1.0	1.14	1.76
UGRC40	3.0	9.0	6.0	0.32	2.64

* The above results are for only those 6 drill holes which showed mineralisation above the cut-off grade of 0.3 grammes per tonne.

 

Core drill holes (drill holes 1 to 6)

 

	Depth of drill hole			Grade
	From	To	Total interval	Gold	Silver
Drill-hole	(metres)	(metres)	(metres)	(g/t)	(g/t)
UGDD1	4.0	63.2	59.2	2.02	6.03
UGDD1	63.2	76.2	13.0	0.20	1.80
UGDD2	3.0	64.5	61.5	3.36	12.13
Including:
UGDD2	3.0	17.0	14.0	8.00	17.09
UGDD2	17.0	35.4	18.4	1.32	16.62
UGDD2	35.4	46.0	10.6	4.26	7.88
UGDD2	46.0	64.5	18.5	1.46	4.43
UGDD3	0.0	35.0	35.0	1.08	10.05
UGDD4	8.0	51.5	43.5	1.82	4.94
Including:
UGDD4	24.0	28.7	4.7	9.07	12.90
UGDD5	0.0	28.0	28.0	0.25	1.64
UGDD6	18.0	59.6	41.6	0.49	1.06
UGDD6	73.4	87.3	13.9	0.79	1.17

 

 

Summary and future evaluation

 

These drill results continue to expand the resource potential at the Gedabek Licence and the Company is encouraged by the positive findings at the Ugur deposit. The area has only partially been drilled and initial field mapping has provided further drill targets. The Phase II core drilling programme designed on a grid for resource estimation will continue over the winter.

 

Installation of six primary topographic base stations that tie into the Gedabek mine grid system to allow for determining the coordinate of the drill collar locations have been completed. A topographical survey of the area is planned which is required for exploration planning, resource estimation and reserve calculation.

 

The 29 RC drill holes, completed since the last release and not reported above, had results to a depth of 34 metres which were either barren or only showed mineralisation below the 0.3 grammes per tonne cut-off grade. They were located in an area of about 250 metres by 70 metres extending west-south-west from the main central mineralised zone. It is planned to test this area by core drilling to deeper levels to ascertain its mineralisation.

 

All RC drilling at Ugur was carried out utilising only one drill bit, indicating the oxide material is comparatively soft and is not abrasive. This suggests that the material would require minimal blasting for extraction, and comminution productivity should be high. Preliminary bottle roll test work results yielded an average recovery of gold of 87 per cent. with low cyanide consumption. The full metallurgical properties of the deposit will be assessed in due course.

 

Competent Person Statement

 

The information in the announcement that relates to exploration results is based on information compiled by Dr Stephen Westhead, Director of Geology at Anglo Asian, who is a Fellow of The Geological Society of London, a Chartered Geologist and a Member of The Institute of Materials, Minerals and Mining.

 

Stephen Westhead has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking, to qualify as a qualified person as defined by the AIM Rules for Companies.  Stephen Westhead has reviewed the exploration results included in this announcement.

 

 

**ENDS**

 

For further information please visit www.angloasianmining.com 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
Laura Harrison	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:

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 mines high grade ore from the 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 2015 from Gedabek totalled 72,032 ounces with 969 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 commenced production in the last quarter of 2015. This is initially 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.