Anglo Asian Mining PLC Regulatory News (AAZ)

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

01 March 2021

Anglo Asian Mining plc

H2 2020 Geological Exploration Activities

Gedabek, Gosha and Ordubad Contract Areas

Anglo Asian Mining PLC ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to provide a summary of its extensive and productive geological exploration activities from 1 July to 31 December 2020 ("H2 2020") at its Gedabek, Gosha and Ordubad Contract Areas.

The exploration programme resulted in a new discovery "Zafer" during H2 2020, which was announced in January 2021. Zafer is a copper-gold mineral occurrence approximately 1.5 kilometres ("km") from the Company's processing facilities at Gedabek.

The comprehensive exploration programme already underway at Gedabek continued in H2 2020 and substantial drilling was carried out at several priority mineral deposit targets. A considerable amount of exploration was also carried out at its Gosha contract area. However, COVID-19 travel restrictions continue to impede the geological work that could be undertaken at Ordubad. Detailed reports of the Company's work programmes, including drill hole data and other exploration results for each contract area, can be found following the links below in each relevant section and on the Company's website (www.angloasianmining.com).

Highlights

Gedabek

· New mineral discovery Zafer announced on 19 January 2021

o Copper-gold mineral occurrence discovered approximately 1.5 km north-west of the Company's Gedabek processing plant

o Significant drill hole intersection of copper-gold mineralisation - 113 metres at 0.5 per cent. copper and 0.7 grammes per tonne ("g/t") of gold

o Maximum grades within all drill holes completed to 31 December 2020 of up to 6.0 per cent. copper, 14.6 per cent. zinc and 12.4 g/t of gold

· Initial models of gold and copper mineralisation completed and drilling activity continued in the Avshancli mineral district

o Initial models of gold and copper mineralisation completed for Avshancli 1 which exhibit a central zone of about 200 by 300 metres surrounded by satellite zones

o The central zone is free digging with the possibility of mining the area in the near future by open pit

o Significant drill hole intercepts of up to 16.7 g/t of gold were reported

o Outcrop and trench sampling reported notable grades of up to 19.9 g/t of gold

· Initial drill programme commenced and surface Induction Polarisation ("IP") survey conducted at Gilar

o Preliminary interpretation of IP survey shows main anomalies are located in the south-east and north-east part of the mineralised area

o Significant drill hole intercepts were reported of up to 13.3 g/t of gold

· Substantial drilling completed at the Gadir and Gedabek underground mines

o Gold grades of up to 6.2 g/t of gold were reported in the underground Gedabek mine

o Gold grades of up to 4.5 g/t of gold were reported in the underground Gadir mine

· Core drilling continued at Ugur Deeps, targeting the high-grade copper and silver mineralisation

o Seven drill holes were completed with intersections of more than one per cent. copper encountered at depths of around 300 metres

Gosha

· Infrastructure to support sustained geological exploration now completed including a geological camp

· Drilling continued close to the Gosha underground mine targeting areas of extension to "Zone 5" and in the "New Zone" (the area between "Zone 5" and "Zone 13")

o Significant gold grades of up to 15 g/t of gold were encountered

o Assay results confirm that gold mineralisation exists at depth below "Zone 5" and "New Zone"

Ordubad

· Due to a continuation of the access restrictions as a result of COVID-19, no drilling was carried out in H2 2020

· A limited trenching programme continued at the Uchurdag and Unus targets:

o 149 trenches totalling 561 linear metres were completed

o 560 trench samples collected from the Uchurdag and Unus targets and results will be reported in H1 2021

Stephen Westhead, Director of Geology & Mining, commented, "Our comprehensive geological programme continues to yield excellent results. We were very pleased to report in January the discovery of Zafer in the second half of last year. Zafer is considered a very significant discovery and a preliminary estimate of the deposit size is about six million tonnes of mineralised rock. It is also very close to our processing facilities and very little additional infrastructure will be required to bring it into production. We envisage production will be by underground mining.

"Substantial further exploration work was also carried at Gedabek, in particular at Avshancli and Gilar. An initial model of Avshancli shows gold and copper mineralisation in a 200 to 300 metre central zone surrounded by satellite zones. The central zone is free digging, and we are considering the possibility of mining this area in the near future by open pit. A core drilling programme commenced at Gilar and a surface Induction Polarisation survey was also carried out.

"Work continued at Gosha and good drill results were obtained from holes around the existing narrow vein mine. Gosha is very under-explored and we continued with both outcrop sampling and trench sampling throughout the contract area. Unfortunately, drill access was still not possible to Ordubad due to the COVID-19 pandemic. However, some limited trench sampling was carried out at the Uchurdag and Unus targets"

Gedabek Contract Area ("Gedabek CA")

Gedabek open pit and Duzyurd

There was no exploration in and around the operating Gedabek open pit and Duzyurd in H2 2020 due to production priorities. However, some reverse circulation drilling was carried out for grade control and mine planning purposes.

Gadir and Gedabek underground mines

A considerable amount of exploration activity was completed at Gedabek underground during H2 2020. Various platforms were utilised to complete 23 core drill holes (16 in BQ diameter and 7 HQ/NQ diameter) for a total of 1,371 metres. Gold grades of up to 6.2 g/t of gold were reported.

Significant drilling was carried out in the Gadir underground in H2 2020. 14 core drill holes (14 in BQ diameter) were completed for a total of 533 metres. Gold grades of up to 4.5 g/t of gold were reported.

Ugur Deeps

Exploration in H2 2020 was focused on and around the Ugur open pit to assess the potential extensions to the Ugur deposit. Seven core drill holes were completed to the south-east of, and around, the Ugur open pit. These holes targeted deeper extents of high-grade copper-silver mineralisation. Intersections assaying more than one percent copper were encountered at depths of around 300 metres. Drilling is continuing in H1 2021.

Zafer

Zafer is a new discovery which was announced 19 January 2021. Zafer was defined by Anglo Asian's in-house exploration group and is a new mineral occurrence approximately 1.5 km north-west of the Company's Gedabek processing facilities. The mineralisation was identified by geological exploration follow-up of field mapping between ZTEM targets. Geological, structural and alteration mapping was used to target the initial drilling, which commenced in August 2020. A series of drill holes demonstrated that the geology progressively moved from altered rock into weakly mineralised rocks and finally into the zone of significant mineralisation. 

Once the scale of the mineralisation was understood, ground-based IP and resistivity electrical geophysics was employed to define the potential extent of the mineralisation. In total, 10 profile lines covering an overall length of nearly 25 km were completed. The 2-D and 3-D interpretations resulted in the identification of a number of "hot spot" anomalies that are being followed up with further drilling.

The geology of the area is structurally complex, comprising mainly of Upper Bajocian-aged volcanics. The mineralisation seems to be associated with a main northwest-southeast trending structure, which is interpreted as post-dating smaller northeast-southwest structures. In the southwest area, outcrops with tourmaline have been mapped, which can be indicative of the potential for porphyry-style mineral formation. The exploration area is located along the regional Gedabek-Shekarbek fault system, with Shekarbek being another target area known to host copper mineralisation, situated in the northwest of the zone.

In 2020, 12 drill holes were completed totalling 7,675 metres. The drill results are summarised in the linked report. The deposit is currently being drilled with three core drill machines and further geophysical work will be carried out if required. Sampling for a mineralogical study is also underway to assess the textural relations between the metallic minerals and gangue mineralogy. This will be used to assess the associations between the copper and gold mineralisation (grain size and liberation characteristics), which will be used to determine the grind sizes and processing options.

Based on the work in 2020, a preliminary estimate of the deposit size is about six million tonnes of mineralised rock.

Avshancli district

Avshancli is a significant mineral district which is 10.5 km north-east of the Gedabek open pit. Avshancli is a gold-copper occurrence comprising three defined areas, Avshancli 1, 2 and 3. In H2 2020, detailed mapping continued over the region. Both core and reverse circulation drilling, as well as outcrop and trench sampling, were carried out. These programmes all remain ongoing. Fourteen core drill holes totalling 2,978 metres and 54 reverse circulation drill holes totalling 3,676 metres were completed. Significant intercepts of up to 16.7 g/t of gold were reported. Outcrop and trench sampling reported notable grades of up to 19.9 g/t of gold.

Initial models of gold (at > 0.3 g/t gold) and copper (at > 0.2 per cent.) mineralisation have been prepared for Avshancli 1. The mineral concentrations exhibit a central zone about 200 by 300 metres surrounded by satellite concentrations that are currently disconnected from the main central zone. The central area contains gold mineralisation near surface in a substrate that is free digging. The thickness of the zone seems restricted and work is continuing to assess geological controls on the continuity both laterally and at depth. Exploration is on-going with further work planned to test the continuity from the central area to the satellite zones.

Gilar

Gilar is a new mineral occurrence located approximately two km south of Avshancli 1. A considerable amount of exploration was completed during H2 2020 comprising core drilling and outcrop mapping. A ground-based Induction IP survey was also carried out.

To commence the initial drill programme, 19 core drill holes were completed at Gilar during H2 2020 totalling 5,832 metres. Significant intercepts were reported of up to 13.3 g/t of gold. An additional three core drill holes were drilled in the flank of the Gilar for the evaluation of ZTEM shallow targets ZS14 and ZS15. Interpretation of the ZTEM drill holes will be reported in 2021.

BLASTO LLC were contracted to conduct an IP survey over the Gilar mineralisation area, which was carried out between 19 August to 1 September 2020. The target depth of exploration was 400 metres. Six profile lines (including one test profile) were run. Interpretation of the IP data is currently being undertaken by both an external consultant and the Company. The preliminary interpretation shows the main anomalies are located in the south-east and north-east part of the mineralisation area.

A detailed report on the H2 2020 exploration activities at the Gedabek CA can be found at https://www.angloasianmining.com/operations/exploration-and-development/.

Gosha Contract Area ("Gosha CA")

Preliminary infrastructure has now been constructed at Gosha to support exploration efforts. In H2 2020, seven core drill holes were completed for a total of 1,636 metres. These were drilled around "Zone 5" and the now named "New Zone" between "Zone 5" and "Zone 13", which is approximately 500 metres from "Zone 5". The aim of this drill programme continues to be to test the Gosha vein system at depth, below the current "Zone 5" and to further assess the "New Zone". Significant gold grades of up to 15 g/t of gold were encountered. These assay results confirm that gold mineralisation exists at depth below "Zone 5" and "New Zone".

Surface exploration was also carried out at the Gocdere and Khatinca regions of the Gosha CA. 145 outcrop samples were collected and 14 trenched totalling 301 metres were completed from which 190 samples were taken.

A detailed report on the H2 2020 exploration activities at the Gedabek CA can be found at https://www.angloasianmining.com/operations/exploration-and-development/.

Ordubad Contract Area ("Ordubad CA")

Due to COVID-19 restrictions, drill access continued to be restricted and therefore no drilling was able to be undertaken in H2 2020. Trench work was carried out during H2 2020 on the Unus and Uchurdag gold vein systems. A total of 149 trenches were dug amounting to 561 linear metres. 560 samples were obtained at one metre intervals unless geological constraints warranted adjustment in sample length. Assay results for these samples have not yet been received and will be reported in H1 2021.

The Company is still awaiting results from the samples collected by the geological team from the Natural History Museum London as part of their ongoing From Arc Magmas to Ores ("FAMOS") international research project. This study is being carried out to determine whether there are any indications of a porphyry system within the Ordubad CA. The results of this investigation should have been available by now, but unfortunately they have been delayed by the COVID-19 pandemic.

A detailed report on the H2 2020 exploration activities at the Gedabek CA can be found at https://www.angloasianmining.com/operations/exploration-and-development/.

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 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 at its active Gedabek, Gosha and Ordubad contract areas assembled from analysis of historic Soviet geological data and held under a Production Sharing Agreement ("PSA") modelled on the Azeri oil industry. The Company also has three recently restored contract areas in the formerly Occupied Territories and Nagorno Karabakh under its PSA which will be evaluated as soon as access permission is received from the Government of Azerbaijan.

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 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. 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 67,249 gold equivalent ounces ("GEOs") for the year ended 31 December 2020. 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.

Anglo Asian is also actively seeking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for properties in other jurisdictions in order to fulfil its expansion ambitions and become a mid-tier gold and copper metal production company. It has announced that it is negotiating a joint venture with Conroy Gold and Natural resources PLC to explore and develop various gold properties in The Republic of Ireland and Northern Ireland.