Aerial ZTEM and Aeromagnetic Survey Update

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

19 June 2019

 

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

Aerial ZTEM and Aeromagnetic Survey Update

Two new highly prospective targets identified - Korogly and Zehmet

Gold grades of 43 and 95 grams per tonne found in two surface rock samples at Zehmet

 

Anglo Asian Mining plc, the AIM-listed gold, copper and silver producer focused in Azerbaijan, is pleased to release a summary of the initial assessment of the anomalies identified by the aerial ZTEM survey at its Gedabek Contract Area ("Gedabek"). This survey has identified several highly prospective targets and follow-up exploration has found surface rock with gold mineralisation.

 

Highlights

·    Targets identified in areas of known mineralisation and areas previously not explored

·    Targets classified into 20 shallow epithermal/porphyry ("EP") targets (depths of 300 metres or less), five deep EP targets (depths of between 301 to 500 metres) and six porphyry targets

·    Seven shallow EP targets near known mineralisation and one overlapping porphyry target have been prioritised for further investigation so that any deposits discovered can be rapidly developed into open pit mines

·    Geological fieldwork, including mapping, started at two shallow EP targets (designated as Korogly and Zehmet)

o Two surface rock samples at Zehmet obtained by grab sampling contained gold grades of 43 and 95 grammes per tonne of gold

·     Geological trench-work to commence at the Korogly and Zehmet targets by end Q3 2019

·     Core drill rigs being mobilised for summer drilling campaign

 

Anglo Asian Director of Geology and Mining, Dr. Stephen Westhead, commented: "Initial assessment of the results of the aerial ZTEM survey are extremely encouraging. The survey has successfully identified targets in areas of known mineralisation and has also indicated the presence of mineralisation in areas where there has been no previous exploration. This clearly demonstrates the future potential of the Gedabek Contract Area. Assay results from surface grab samples at the Zehmet target have yielded very high-grade gold results, with two significant results being 43 and 95 grammes per tonne. Finds such as these are rare in gold exploration and it is now a priority for us to find the source of this mineralisation.

"Some of the targets straddle the Gedabek Contract Area boundary. However, under our Production Sharing Agreement, the Company has the right to explore and exploit deposits beyond its boundaries, provided there is geological continuity that has been demonstrated on the basis of structural geology framework and ore formation models. These targets could therefore lead to the possible expansion of the Gedabek Contract Area.  

"A mining concession with the location and scale of Gedabek is a rare and exciting opportunity. Whilst already hosting three mines, it is evident from these results and other complementary exploration work that the full potential of Gedabek has yet to be realised. We are now working hard on our ultimate objective of making a significant new discovery to create further value for all shareholders"

 

Preliminary assessment of the results of the aerial ZTEM survey

The ZTEM survey has yielded 31 favourable targets which are additional to the prospects already identified in-house. These newly identified targets have been ranked and assimilated into the current exploration plan, so that study can commence in parallel with existing prospects. The new targets were categorised into three groups based on anomaly depth:

 

·          Shallow: 20 targets at 300 metres or less depth (labelled as "Zs1" to "Zs20");

·          Deep: 5 targets at between 301 to 500 metres depth (labelled as "Zd1" to "Zd5"); and

·          Porphyry: 6 targets at various depths (labelled as "M1" to "M6").

 

Targets Zs15 and Zs18 have now been designated the names of Korogly and Zehmet respectively.

 

The shallow targets are possible epithermal-porphyry mineralisation deposits. They potentially enable the Company to increase its portfolio of exploitable oxide and sulphide deposits with resources similar to our existing mines which currently produce mixed ores. To process these ores would require no major reconfiguration of the Company's current processing facilities.

 

Targets have been identified over areas where the Company is already aware of the presence of mineralisation, but importantly other areas have also been identified, where no previous exploration activity has been carried out. The data generated from the survey have provided information on the geometry and potential depths of mineralisation zones within a newly interpreted geological structural framework.

 

Several of the targets, including Zehmet, straddle the boundary of the Gedabek contract area. Under the Company's production sharing agreement, the Company has the right to explore for and exploit mineral deposits outside the boundaries of its contract areas provided geological continuity can be demonstrated to within the boundary. This geological continuity must be demonstrated on the basis of structural geology framework and ore formation models.

 

Further details of the survey methodology and results can be found via the following link:
http://www.rns-pdf.londonstockexchange.com/rns/6860C_1-2019-6-19.pdf 

 

Methodology used to assess and rank targets identified by the aerial ZTEM survey and subsequent follow-up

The results of the aerial ZTEM survey have been assessed and 'ranked' in terms of prospectivity. The initial ranking has focused on those targets nearer surface which can be evaluated and brought to production more quickly than the deeper targets. The Company has thus worked to prioritise the shallow targets (depth of 300 metres or less) that could be potentially be mined by open pit methods. 

 

Based on the current lithological and structural geology understanding of Gedabek, each of the anomalies were assessed on the basis of their proximity to known mineral trends and structural position, as well as the nature of the anomalies themselves. The intensities of the ZTEM and magnetic anomalies were analysed to identify strong signatures and targets, with significant contrast between high and low ZTEM and magnetic values across the anomaly, or at the boundaries.

 

Seven shallow targets and a porphyry target ("M1") that overlaps with a deep ("Zd1") and shallow anomaly ("Zs3") have initially been ranked for geological fieldwork follow-up. Key to identifying targets that could potentially become mines is to build confidence in the presence of mineralisation through geological data layering. This procedure allows data from surface geological investigation methods, including mapping, sampling, geochemistry and ground geophysics to be built-up over the target and adjacent areas to provide confidence in targeting drill holes.

 

Following initial fieldwork, a local geological and structural map based on geomorphological features will be produced as an overlay to the ZTEM anomalies. This map will be used as a base map for field sampling of both rock outcrop and rock float. This initial programme of geological work is scheduled to take about two weeks for each shallow target, with deeper and porphyry targets taking longer. The Company will utilise its ground-based magnetometer for refining the ZTEM anomalies, which will define rock contacts and geological structures within each anomaly. If the surface sample assay and analysis results are positive, trenching and possibly pitting will commence. This would then be followed by drilling to investigate at depth should the trenching results be encouraging.

 

The Company has recently mobilised core drill rigs to the Gedabek site and plans shortly to commence drilling work to further investigate some of the targets. Although the various follow-up ground-based geological activities will not have been completed, the results of the drilling will allow the Company to correlate geophysical responses of conductivity-resistivity and magnetic signatures with the rock and mineralisation column from the resultant drill core.

 

Results of preliminary geological fieldwork

Of the seven prioritised targets, fieldwork has already commenced on two of the shallow anomalies, namely Korogly and Zehmet for which preliminary information on the initial geological work is presented below:

 

Korogly

The centre of this target is located approximately six kilometres North East of the Gedabek open pit mine. It is situated within the Gedabek contract area, close to the village of Sӧydülü.

 

The feature is elongated roughly in the North West direction and is approximately two kilometres in length. The geology of the region comprises Quaternary sediments that overlay an intrusive body and is considered a structurally complex area. The anomaly lies along a North West-striking fault and coincides with a zone of low magnetic susceptibility, likely indicative of magnetite-destructive alteration.

 

This anomaly is located proximal to the Maarif main mineralised zone, which makes it a potential candidate for copper mineralisation. Historical reconnaissance conducted over the region includes geological mapping, outcrop sampling and soil sampling - both of these sampling methods returned good copper grades and malachite mineralisation has been identified in the area.

 

Zehmet

The centre of this target is located approximately 12 kilometres North East of the Gedabek open pit mine. It straddles the boundary of the Gedabek contract area. However, as set out above, exploration can be conducted outside of the contract area providing geological continuity can be demonstrated and this has been confirmed for Zehmet.

 

The feature is elongated roughly in the North North West direction and is over 1.5 kilometres in length. The anomaly lies within the Atabay-Slavyanka felsic intrusive rocks and is considered to be structurally complex. There are known mineral occurrences around the Maarif Region, and this anomaly may be linked, making it a target for epithermal base metal mineralisation. Surface sampling of both rock float (grab samples) and outcrop has been conducted, resulting in rocks of significant gold grades of 43 and 95 grammes per tonne being found.

 

For more detailed information and data on the above two critical targets, please refer to the linked report.

 

Porphyry targets

The Company will also assess the signatures of its porphyry targets. One anomaly ("M1") has been selected which overlaps with both a deep ("Zd1") and shallow target ("Zs3") and which is located in the north-west corner of the contract area. Field-work to initially assess this area will take an extended period of time due to its large surface area.

 

Satellite surveying

The Company plans to obtain satellite images of its three contract areas using the WorldView-3 satellite sensor. This satellite sensor is the first to have seventeen high resolution bands that capture information in the visible, near-infrared and short-wave infrared regions of the electromagnetic spectrum. It provides the highest spatial and spectral resolution satellite imagery commercially available.

 

The satellite images typically include a number of geological colour composites and alteration mapping for alteration minerals i.e. ferrous iron, other iron minerals, and those associated with argillic, phyllic and propylitic alteration (which is a useful tool for mapping porphyry potential). The images will also provide a highly accurate base map for all exploration work that can be utilised for sampling, geological mapping and any survey work, and to position drill rigs with satellite precision, providing a 30 centimetre resolution. 

 

Prior to commissioning imaging for all three contract areas, the Company will test the system over the identified porphyry M1 target and adjacent areas that cover 140 square kilometres. The resultant data will be used to focus the follow-up field work, and better understand its potential for alteration mapping. The assessment of its applicability to alteration consistent with epithermal and porphyry deposit is critical not only for the Gedabek contract area, but also the future application at the Ordubad contract area that also exhibits porphyry potential.

 

References

 

[1] Airborne ZTEM/Magnetic Survey Highlights report:
http://www.angloasianmining.com/media/pdf/ZTEM%20Summary.pdf

 

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.

 

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.

 

**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
Soltan Tagiev	SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel + 44 (0) 20 3470 0470
Isabel de Salis	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177
Gaby Jenner	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's main operating location is the Gedabek contract area ("Gedabek") which is a 300 square kilometre area in the Lesser Caucasus mountains in western Azerbaijan. The Company developed Azerbaijan's first modern operating gold/copper/silver mine at Gedabek which commenced gold production in May 2009. Mining at Gedabek was initially from its main open pit, which 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. In September 2017, production commenced at the Ugur open pit mine, a recently-discovered gold ore deposit at Gedabek. 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.

 

The Company produced 83,736 gold equivalent ounces ('GEOs') for the year ended 31 December 2018. Gedabek is a polymetallic ore deposit that has gold together with significant concentrations of copper in the main open pit mine, and an oxide gold-rich zone at Ugur. The Company therefore employs a series of flexible processing routes to optimise metal recoveries and efficiencies. The Company produces gold doré through agitation and heap leaching operations, copper concentrate from its Sulphidisation, Acidification, Recycling, and Thickening (SART) plant and also a copper and precious metal concentrate from its flotation plant. A second dedicated crusher line has been commissioned and is now in operation for the flotation plant to enable it to operate independently of the agitation leaching plant.

 

The Company has forecast metal production for FY 2019 of between 82,000 to 86,000 gold equivalent ounces ("GEOs"). Of the forecast production for FY 2019, between 28,000 to 30,000 GEOs is in the form of copper and gold flotation concentrate.

 

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.