Anglo Asian Regulatory News (AAZ)

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

8 August 2019

Anglo Asian Mining plc

H1 2019 Geological Exploration Activities

Gedabek, Gosha and Ordubad Contract Areas

Anglo Asian Mining PLC ("AAM" or the "Company"), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to provide a summary of its geological exploration activities from 1 January to 30 June 2019 ("H1 2019") at its Gedabek, Gosha and Ordubad Contract Areas. Detailed reports of the Company's work programmes and exploration results for each Contract Area can be found following the links below in each relevant section and on its website (www.angloasianmining.com).

Highlights

Gedabek

·; Significant progress made on ZTEM targets:

o Primary ranking completed and exploration started over entire region

o 325 outcrop samples collected at Korogly and Zehmet - as previously reported gold grades of up to 95.40 grammes per tonne

o Trenching completed at Zehmet with gold grades of up to 3.44 grammes per tonne and 2.09 per cent. copper

o Outcrop sampling commenced over an additional eight shallow epithermal/porphyry targets

·; Eight diamond drill-holes totalling 949 metres completed around the Gedabek open pit with economic gold grades intersected in all drill-holes with gold grades of up to 11.05 grammes per tonne

·; Ventilation shaft completed from the Gedabek underground tunnelling to surface which will allow for continued underground development and exploration

·; At Gadir, a total of 101 diamond drill-holes were completed comprising three deep surface exploration drill-holes, 33 underground exploration drill-holes and 65 underground drill-holes to increase stoping confidence with gold grades of up to 11.09 grammes per tonne

Gosha

·; Mineralisation at depth confirmed in an area ("Zone 5") below an existing adit of the Gosha underground mine:

o 1,897 metres of diamond drilling completed with gold grades of up to 5.92 grammes per tonne

·; Exploration started at a target "Khatinca" which has similar geology to the existing Gosha underground mine

·; Outcrop sampling carried out at the Gosha underground mine, Asrikchay and Khatinca - encouraging gold grades (up to 7.46 grammes per tonne) and copper grades (up to 10.32 per cent.) found at Asrikchay

Ordubad

·; Very promising results from the drill programme at Dirnis with 18 diamond drill-holes completed totalling 3,643 metres - initial assay results returned one drill-hole with 3.8 per cent. copper and 47.64 grammes per tonne silver at a depth of 102 to 103 metres

·; Drilling programme completed at the gold target "Keleki" with 10 diamond drill-holes completed totalling 1,765 metres - awaiting results

·; Geochemical sampling study conducted at Destabashi, a new copper target including the collection of 244 samples and detailed geological mapping over a 4.2 square kilometre region -awaiting results

Anglo Asian Director of Geology & Mining, Stephen Westhead, commented, "Exploration at all three Contract Areas has delivered very positive results. At Gedabek, we continue to evaluate the ZTEM anomalies with results showing mineralisation both on or near surface. Additionally, the continued exploration near our existing mines is still giving excellent results which should prolong their mine life. With the completion of the ventilation shaft from the Gedabek underground to surface, work can continue with the tunnelling allowing for the continuation of the underground exploration plan.

"The near mine exploration at Gosha provides encouraging results especially the gold grades found in "Zone 5" below an existing adit in our underground mine. Robust grades have also been found in outcrop samples at Asrikchay. We are also commencing work on a target at Gosha, "Khatinca" which has very favourable geology. It is staring to become clear that Gosha is an underexplored property with excellent potential. The Ordubad area also continues to yield significant copper and gold results, further demonstrating the important potential of this region using modern exploration techniques.

"We now have in place a programme to comprehensively explore all our three Contract Areas which is proceeding at a fast pace. Overall, the exploration and mining geology team continue to be enthusiastic at the potential to increase future reserves and grow the production outlook. This work is clearly demonstrating its promise to increase shareholder value."

Gedabek Contract Area ("Gedabek")

Overview

Gedabek is approximately 300 square kilometres in size and hosts the Gedabek open pit, Gadir underground mine and Ugur open pit. Exploitation of the ore at Gedabek is reported to have started as far back as 2,000 years ago. During the 1990s, exploration work significantly ramped up at Gedabek and in 2005, AAM successfully acquired the project. AAM developed the deposit into an open pit operation in 2009, marking the Company as the first gold-copper producer in Azerbaijan in recent times. The mines of Ugur and Gadir were later discovered by AIMC geologists and developed into mining operations.

Main objectives of the 2019 Gedabek Exploration Programme

·; Continued exploration of the copper potential at the Gedabek open pit

·; Exploration of the mineralisation potential at Gedabek underground

·; Expand drilling at Gadir to test lateral and down-dip extents

·; To rank all ZTEM targets and commence exploration work over those considered 'high-priority'

Overview of Exploration Activity in H1 2019

Gedabek open pit

Nine diamond drill-holes were completed at the Gedabek open pit area during H1 2019 totalling 1,085 metres. Eight of the drill-holes were to increase the data density around zones to provide continuity confidence of copper mineralisation and their location focused around the north-western and south-eastern margins of the open pit. The results will be utilised in the next Gedabek Mineral Resource update. Notable intersections include:

An additional diamond drill-hole was completed for geotechnical assessment in preparation for construction of the ventilation shaft (which is now complete), this will allow for continued tunnelling below the open pit and exploration drilling to take place.

A total of 63 reverse circulation ("RC") drill-holes were also completed during H1 2019 proximal to the open pit, for grade control and near-mine exploration purposes. These were focused around regions where modelling of the copper ore body required constraining, in preparation for the next Mineral Resource Estimation and mine planning.

Gadir underground mine

A total of 101 diamond drill-holes were completed:

·; three deep exploration drill-holes from surface targeting lateral extensions of the deposit;

·; 33 underground exploration drill-holes of either HQ (63.5 millimetre) or NQ (47.6 millimetre) diameter, which targeted previously untested areas; and

·; 65 shorter underground drill-holes producing BQ-sized (36.5 millimetre) core, designed to increase confidence around sites due for stoping.

 In-house geological wireframe modelling of the results has commenced. Notable intersections include:

ZTEM Study

Significant progress has been made with the ZTEM targeting, primary ranking was completed during H1 2019 with exploration work starting over the region. Targets currently under study include Korogly, Zehmet and Gyzyljadag/Yagublu (ZS8 and ZS9). Gyzyljadag and Yagublu are being evaluated concurrently due their close proximity to each other.

Over each target, detailed field mapping is ongoing in tandem with outcrop sample collection. At all targets, a total of 443 field outcrop samples were collected and have been assayed. Trenching has commenced at Zehmet, with 506 samples collected during H1 2019. Samples are being submitted to the AIMC laboratory where they will be assayed for gold, silver, copper and zinc. Positive field observations have included jasperoid-bearing veins found on surface and malachite found within both quartz vein and volcanic samples.

The Company has received results for all outcrop samples with excellent results from Korogly and Zehmet including one sample showing strong limonitic alteration with a grade of 95.40 grammes per tonne as previously reported. Follow-up work is being completed at all areas by way of further outcrop sampling, trenching or ground based magnetic surveying.

Exploration planned in H2 2019

·; Near-mine exploration is continuing around the Gedabek open pit and peripheral deeper drilling to help further explore the underground prospects.

·; Further lateral and down-dip drilling will continue around the Gadir orebody.

·; Remote sensing satellite imagery (WorldView-3) will be obtained over the Almalytala region; this will cover the Almalytala Shallow (ZS3), Almalytala Deep (ZD1) and Hachagaya (M1) ZTEM anomalies and will test the capabilities of this procedure over high relief and densely vegetated terrain. If successful, WorldView-3 will be used in the future over other regions within Gedabek and possibly Gosha.

·; A ground-based magnetometer survey over Korogly to define discrete anomalies over the region.

A detailed report on the H1 2019 exploration activities at Gedabek can be found at http://www.rns-pdf.londonstockexchange.com/rns/3846I_1-2019-8-8.pdf and on the Company's web-site (www.angloasianmining.com).

Gosha Contract Area ("Gosha")

Overview

Gosha is located about 50 kilometres to the northwest of Gedabek and is approximately 300 square kilometres in size. The Gosha underground mine has more than six kilometres of exploration adits driven during the Soviet era and limited narrow-vein gold mining is currently carried out. Gosha is deemed to be geologically broadly similar to Gedabek; however, compared to Gedabek, Gosha is under-explored.

Main objectives of the 2019 Gosha Exploration Programme

·; To assess the potential depth extensions of mineralisation beneath current development at the underground Gosha mine.

·; Increase data collection around Asrikchay (including outcrop sampling, potential further diamond drilling) in order to establish a mineralisation model and further geological understanding of the area.

·; To identify potential new areas of mineralisation and drill targets for drilling in 2019 through mapping and outcrop sampling.

Overview of Exploration Activity in H1 2019

Near mine exploration

A total of nine diamond drill-holes were planned at the Gosha near-mine area during 2019. The aim of this drill programme is to test the Gosha vein system at depth below an existing adit development ("Zone 5"). One drill-hole (GSHDDA01) was completed early, in Q4 2018, and the results have been previously reported. During H1 2019, a further six drill-holes were completed and the two remaining drill-holes are currently in progress.

During H1 2019, a total of 1,896 metres of core was drilled and assayed at the Gedabek laboratory. Significant drill-hole intersections include the following:

Preliminary analysis of these latest drilling results confirms the dominance of gold mineralisation around the vicinity of Gosha, with minor elevated silver and rare copper grades also intersected.

Asrikchay

No further drilling has been conducted during H1 2019 at Asrikchay, however interpretation of the drill results is in progress.

The target has been divided into two adjacent areas - "QS" and "ASKL". 19 and 8 outcrop samples were obtained during H1 2019 from areas QS and ASKL, respectively. Some notable grades were obtained from the QS area as follows:

Due to grades obtained, exploration will now focus on the QS area.

Khatinca

Exploration commenced in H1 2019. Khatinca is a target one kilometre from the village of Khatyndzhan and approximately 4 kilometres from the existing Gosha mine. Khatinca has been selected for its favourable geology which is similar to the Gosha mine and its easy surface conditions. 22 outcrop samples were obtained during H1 2019 but none returned notable grades. Further work at Khatinca is planned.

Exploration planned for H2 2019

Key projects that will be completed during H2 2019 include:

·; Completion of the drill programme at the Gosha underground mine - once results are returned, modelling of the mineral system at depth will commence

·; Further work (predominantly diamond drilling) is planned at Asrikchay once validation and modelling of the current dataset is complete

·; Further exploration work (outcrop sampling and mapping where possible) over untested regions around the Contract Area

A detailed report on the H1 2019 exploration activities at Gosha can be found at http://www.rns-pdf.londonstockexchange.com/rns/3846I_2-2019-8-8.pdf and on the Company's web-site (www.angloasianmining.com).

Ordubad Contract Area ("Ordubad")

Overview

Ordubad is located in the south-eastern corner of the Nakhchivan region of Azerbaijan, an area known for its mineral potential. Small-scale historical mine development took place during the Soviet era and the region is adjacent to significant porphyry copper deposits in neighbouring countries (e.g. the Sungun copper mine, Iran). Ordubad is part of the Mikhmana-Zangezur tectonic subzone, which hosts a number of known copper, gold and molybdenum deposits.

Ordubad was subjected to Soviet era exploration and geological studies. There are fifteen known mineral deposits and occurrences within Ordubad, six of which have resources classified according to the Soviet resource system. These six gold- and copper-bearing deposits were studied in more detail following the Soviet exploration by the mining consultant group Behre Dolbear. Their Competent Person's Report ("CPR") was included as Part IV in the 2005 Initial Public Offering ("IPO") document of Anglo Asian Mining. This IPO document can be found at http://bit.ly/2TdnhQ6.

According to the CPR: "The Soviets completed extensive technology reports on several properties. In general, the Soviets only completed technology reports on properties they considered should be developed into mining operations.

The Ordubad Contract Area is 462 square kilometres in the Nakhchivan region and contains numerous deposits, six of which have been studied by Behre Dolbear: Shakardara, Piyazbashi, Misdag, Agyurt, Shalala and Diakhchay. These deposits lie within a 5 kilometre radius. The Ordubad Contract Area also contains other significant properties with Soviet era defined resources in Yashiling, Goyhundur, Keleki and Kotam. Porphyry copper deposits of the Ordubad ore region were localised within the western part of the Megri-Ordubad granitoid massif, where the Paragachay, Diakhchay, Misdag, Gey-gel, Geydag, Goyhundur, Shalala and other deposits were found.

In conclusion Behre Dolbear believes that thorough exploration will reveal significantly more potentially economic mineralization than is presently known, especially in the Ordubad and Gedabek Contract Areas [sic]"

An extract from the CPR of the Soviet resources table for Ordubad is shown below. Earlier attempts by the Company to replicate some of the original Soviet results correlated poorly. However, it is believed that the check sampling methodology and the locations for duplication were incorrect. The tonnages of Piyazbashi and Agyurt however were broadly confirmed in previous work by the Company.

The Company believes these figures are not fully defined and intends to carry out further work to review the source reports and then validate with follow-up field work. However, the figures indicate the presence of potentially extensive mineralisation which justifies further work.

Exploration targeting cannot however rely solely on historical Soviet data. For example, two of the Company's three operating mines, namely Gadir and Ugur, were not part of the Soviet deposit inventory. However, modern exploration techniques and processing facilities and contemporary industry economics create a different environment today for exploration.

Main objectives of the 2019 Ordubad Exploration Programme

·; To assess the extent of the copper, gold and associated mineralisation potential of Ordubad

·; To bring new mineral occurrence targets into the resource and reserve development pipeline

·; To identify potential new areas of mineralisation and drill targets for drilling in 2019

·; To determine the logistical requirements for future production

Overview of Exploration Activity in H1 2019

Dirnis (copper and silver prospect)

The Dirnis prospect is located approximately 2.5 kilometres west of the village of Dirnis. A diamond drill programme was completed in H1 2019. 18 drill-holes totalling 3,642 metres were completed ahead of schedule. Assaying is being conducted at the AIMC laboratory and data for some drill-holes have been returned. Significant intersections are as follows:

Results for the remainder of the holes will be reported once available.

Keleki (gold prospect)

A drill programme was completed at Keleki in H1 2019. Ten diamond drill-holes totalling 1,765 metres were completed. The programme was due to commence during H2 2019, however rig availability due to the early completion of the Dirnis drilling allowed acceleration of the Keleki programme. The entire programme was finished by June of 2019. Assaying is being conducted at the AIMC laboratory and data is expected to be available during Q3 2019.

Destabashi

A small-scale surface geochemical sampling campaign was completed during Q1 2019 in the southwest of Ordubad. The total area covered was 4.2 square kilometres, spread over two zones. In total, 244 samples were collected, and detailed geological mapping was completed of the sampling area. 82 samples were collected from 'Zone 1' (approximately 2 kilometres southeast of the village of Khanagha) whilst 162 samples were obtained from 'Zone 2' (adjacent to the village of Desta). Samples were collected 100 metres apart along profile lines spaced 200 metres apart. All samples have been forwarded to Baku for sample preparation. Once complete, the material will then be shipped to the ALS Minerals "OMAC" laboratory in Ireland.

Exploration Outlook for H2 2019

Key items of work remaining from the year-plan and budget of $1.84 million include:

·; Remote sensing utilising the latest satellite technology (WorldView-3); planned for September

·; Follow-up fieldwork alongside the Natural History Museum team including mapping, geochemical data interpretation, drill core interpretation and additional field sampling

·; Surface geological mapping and sampling, with undergraduate geology student mapping projects, encouraging collaboration with Azerbaijani Universities (subject to availability)

·; In-house, detailed interpretation of the data from the 2018 geochemical study completed over Shakardara, Dirnis and Keleki (5,504 samples).

The potential for an extension of the 2018 geochemical study area is being considered, due to the positive grades returned along the eastern margin.

A detailed report on the H1 2019 exploration activities at Ordubad can be found at http://www.rns-pdf.londonstockexchange.com/rns/3846I_3-2019-8-8.pdf and on the Company's web-site (www.angloasianmining.com).

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.

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.

**ENDS**

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

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 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.