16 March 2023

Anglo Asian Mining plc

Targeting 10,000 tonnes of annual copper production at Xarxar following geological modelling and open pit optimisation study

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 it has completed an initial geological block model and open pit optimisation study at the Xarxar deposit. The Company now expects mining and processing of 3 million tonnes of ore per annum, with a production target of 10,000 tonnes of copper metal per annum over a 7-year period.

Since July 2022, an extensive geological exploration programme has been carried out at the Xarxar deposit, targeting the central copper mineralisation zone. Surface drill holes intercepted significant high-grade and continuous grades of copper mineralisation. The base case open pit optimisation study used a copper price of $8,000 and showed over 93,000 tonnes of economically extractable copper. The detailed results of the geological exploration are set out below in appendix one. The Company has used its own in-house estimate of resources and economically extractable copper in this notification and these figures are not based on a Standard, such as JORC. The Company intends to carry out JORC reporting on completion of the ongoing drilling and exploration programme. 

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. An alternative approach utilising the option of in-situ recovery is also being studied.

Exploration is continuing in the central mineralisation zone, and further resource estimation will be carried out.

Anglo Asian Vice-President, Stephen Westhead, commented:

"These results represent an important step in our strategy of transitioning to a mid-tier miner, as Xarxar is expected to contribute a considerable amount of annual copper production to our portfolio. The initial study and exploration have delivered significant upside potential. The Company is enthused by the positive results and potential for advancing a 100,000 tonne plus copper metal project towards the production target. The project's development options, including mining, processing and in-situ recovery, are currently being assessed. The rock mass properties, the presence of copper and molybdenum minerals and the geological setting suggest a porphyry formation."  

Block model of the Xarxar deposit

A preliminary three-dimensional dynamic block model has been completed (Figure 1), which will be updated as further drilling takes place. A drill hole database has been set up, consisting of Anglo Asian and AzerGold CJSC drill results. The model shows that copper mineralisation exhibits encouraging continuity.

Figure 1: Block model of Xarxar showing a cross-section through the three-dimensional model

Mineralisation modelling was carried out within a 0.1 per cent. copper shell and grade-tonnage estimates were made using various cut-off grades. The range of the contained amounts of copper, based on mineralisation above certain depths, is as follows:

Pit optimisation modelling

Preliminary optimisation modelling to test the economics for various mining options is underway to initially assess the open pit potential. The optimisation modelling shows that open pit mining would be economically viable at the Xarxar deposit. Studies are also ongoing to assess underground mining options to yield the optimum mix of open pit and underground mining.

The base case for the open pit optimisation used a copper price of $8,000. Copper metal prices within the range of $5,000 - $20,000 per tonne were used to test the sensitivity of the open pit to copper metal prices and mineral zone geometry. Two pit depths were used as a "minimum" and "maximum" elevation to establish the amount of mineralisation located beneath the various intervening pit floors. Significant mineralisation is located below the open pit floor in the base case. This will allow for the optimisation of the combined open pit and underground mining approach. The results of these initial open pit evaluations are shown in Figure 2.

Figure 2: Cross section showing the various pit shell profiles at various copper prices

The results of the initial open pit optimisation study (Base Case 'OP 3' using a copper price of $8,000) and sensitivities are shown in the following table:

Further drilling targeting both infill and extension of mineralisation is ongoing. In addition, a detailed metallurgical study using the microscopic study of thin and polished sections of rock, along with phase analysis, will be used to determine the supergene and enrichment versus hypogene mineral assemblages. In parallel, Anglo Asian is carrying out metallurgical test work to assess processing options, which include flotation to produce copper concentrate, or copper heap and bacterial leaching, followed by solvent extraction and electrowinning (SX-EW) to produce cathode copper metal.

Appendix One

Geological exploration work carried out at Xarxar

Exploration activity carried out to the end of February 2023 by Anglo Asian on the Xarxar deposit include the following:

·    12 surface trench and 36 outcrop samples

·    19 diamond drill core holes with a total length of 6,696 metres

·    9 reverse circulation holes with a total length of 830 metres

·    472 metres of underground development with a section area 3.5 metres by 3.5 metres

·    327 underground channel samples with total length of 333 metres

·   All drill holes and channel samples have been geologically logged, sampled, assayed and loaded to the new database

·   All data (Anglo Asian and historical) converted to "new standard" database system which will be imported to Seequent "MX deposit" software

·    Geotechnical study of the deposit completed by an independent engineering contractor, including geotechnical core logging, laboratory analysis and surface structural mapping.

·    Mineralogical-petrological and X-ray diffraction (XRD) alteration studies and lithological-structural-alteration mapping of the deposit is in progress.

Utilising the geological model geometry, further drilling has been planned to test extensions of mineralisation and refine the understanding of the geological structure.

The Xarxar deposit hosts a range of copper minerals, including malachite, azurite, chalcocite, bornite, neotocite, chalcopyrite, rarely molybdenite and pyrite minerals associated with intense argillic and phyllic alteration. The maximum and average grades of copper by sample method are shown below:

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.

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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 Garadagh porphyry copper deposit, with a Soviet classified resource of over 300,000 tonnes of copper. https://www.angloasianmining.com/