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:

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:

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)

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)

Glossary

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:

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/