Anglo Asian Regulatory News (AAZ)

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

11 July 2013

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

Q2 2013 Operations Update - Gedabek Gold/Copper/Silver Mine in Azerbaijan

Anglo Asian Mining plc, the AIM listed gold producer in Azerbaijan, is pleased to provide an update on production and operations at its flagship Gedabek gold/copper/silver mine ('Gedabek') in western Azerbaijan for the three months to 30 June 2013 ('Q2 2013').

Overview

·; Gold production for Q2 2013 at Gedabek totalled 8,912oz

·; Q2 2013 gold sales of 5,505oz at an average price of US$1,438per oz

·; Agitation leaching plant construction commissioned on time and US$7 million under budget - expected to improve gold recoveries significantly at Gedabek for Q3 and Q4 2013

·; Gold production target for H2 2013 is 42,500oz Au and FY 2013 remains at 60,000oz Au (c.20% increase from FY 2012 gold production of 50,125oz)

·; Lower operating costs of US$450-500 per ounce

·; Copper, silver and gold production from SART processing operations for Q2 2013 totalled 63 tonnes of copper, 8,322oz of silver and 12oz of gold

·; Copper concentrate sales to Glencore during Q2 2013 totalled 1,040 wet metric tonnes ('WMT')

·; Net debt, being interest-bearing loans and borrowings less cash and cash equivalents, totals US$47 million

Anglo Asian CEO Reza Vaziri said, "During the quarter we were delighted to announce the successful commissioning of our new agitation leaching plant at Gedabek. In its first few weeks of operation, it processed ore at a rate of 67 tonnes per hour and produced 3,035 ounces of gold. We expect to ramp up the processing rate at the plant during H2 2013 to 100 tonnes of ore per hour and we are confident that this in conjunction with our existing heap leach operation, will produce 42,500 and 60,000 ounces of gold for H2 2013 and FY2013 respectively.

"In addition, 1,040 WMT of copper concentrate sales were realised during Q2 2013, and a further sales contract with Seagate signed, securing on-going sales in Q3 2013 which will see our copper concentrate product adding to our bottom line and in turn increasing our profitability for the second half of the year. These sales in tandem with the increase of gold production rates from our agitation leaching plant should see our cost per ounce for gold drop from US$668 in FY2012 to c.US$450 - 500 for FY2013. This would be a significant milestone in Gedabek's development as a low-cost gold producer in Azerbaijan."

Full Details

During Q2 2013, the Company produced 8,912oz of gold ('Au') at Gedabek. Of this, 5,877oz was produced from Gedabek's heap leach operations and 3,035oz from the new agitation leaching plant which was commissioned in June 2013. Anglo Asian has completed gold sales* for the period of 5,505oz Au at an average of US$1,438 per oz (Q1 2013: US$1,638). Sales for Q2 2013 were lower than Q1 2013 sales due to a delay in gold sales in June 2013 when the new agitation leaching plant was being commissioned. These sales were realised in the first week of July 2013 with 5,620oz of gold shipped. The FY 2013 gold production target remains at 60,000oz, a circa 20% increase to that of FY 2012 (50,125oz).

The following summary table of gold production and prices outlines quarter-on-quarter gold production at Gedabek for the past year. 

Gedabek's heap leach stacking operation continued to perform in line with management's expectation in Q2 2013. During the period the Company transferred 200,658 tonnes of dry ore onto the leach pad with an average gold content of 1.34g/t (Q1 2013: 186,555 tonnes), and milled 33,368 tonnes in the agitation leaching plant. The increase in ore transferred to the leach pads is in line with a planned change in Gedabek's production schedule in Q1 2013. Higher grade ore is now being stockpiled in order to provide a supply of ore to feed the new agitation leaching plant.

As mentioned the Company's agitation leaching plant, built to improve gold recovery and production at Gedabek, was successfully commissioned in June 2013, US$7 million under budget at US$45 million. The plant is expected to improve the gold recoveries of both oxide and sulphide ores at Gedabek to levels of 85% and 69%, respectively and has been designed to initially treat 100 tonnes of ore per hour.

In terms of copper concentrate production from the Company's Sulphidisation, Acidification, Recycling, and Thickening ('SART') plant at Gedabek, production for Q2 2013 totalled 63 tonnes Cu, 8,322oz Ag and 12oz Au (Q1 2013: 93 tonnes Cu, 9,875oz Ag and 16oz Au). Production for Q2 2013 was marginally lower than Q1 2013 however volumes are expected to increase significantly during H2 2013 due to the commissioning of the new agitation leaching plant at Gedabek.

Copper concentrate sales for the period totalled 1,040 WMT. To date, under Anglo Asian's copper contract with Glencore which it signed in Q4 2012, the Company has delivered 1,750 WMT of copper concentrate and has exceeded its 1,500 WMT copper concentrate sales expectation with Glencore. A further 550 dry metric tonnes of copper concentrate sales remain under the contract and the Company expects to meet this order in 2013. The Company signed a further contract with Seagate Minerals and Metals Inc ('Seagate') for 750 wet metric tonnes ('WMT') of copper concentrate +/- 7% over July and August 2013.

The copper contract sales will significantly contribute to Gedabek's cash costs bottom line to achieve a reduced operational cash cost of US$450-US$500 per ounce of gold by the end of 2013.

Total funds drawn down from the International Bank of Azerbaijan ('IBA') for the Agitation Leaching Plant were US$45 million at 30 June 2013. A further short term debt facility was used from the IBA for US$2.3 million and cash in the bank was US$0.3million at 30 June 2013. Net debt, being interest bearing loans and borrowings less cash and cash equivalents therefore, stood at US$47 million at 30 June 2013.

**ENDS**

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

\* The Company has a Production Sharing Agreement ('PSA') in place with the Government of Azerbaijan which governs how the production of each of the Company's Contract Areas under the PSA is divided between the Company and the Government of Azerbaijan. Currently, the Company takes ownership of 87.25% of the production at Gedabek, which accounts for the difference between the total gold produced at Gedabek and the amount of gold sold by the Company. It should also be noted that there will always be short-term timing differences between gold production and sales.

Notes:

Anglo Asian Mining plc (AIM:AAZ) is a gold producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan. The Company has a 1,962 sq km prospective exploration portfolio, assembled from analysis of historic Soviet geological data and held under a Production Sharing Agreement ('PSA') based on the Azeri oil industry. The Company developed Azerbaijan's first operating gold/copper mine, Gedabek, which commenced gold production in May 2009. Gold production for the year ended 31 December 2012 totalled 50,215 oz of gold and FY 2013 gold production target is 60,000 oz of gold in line with commissioning of a new agitation leaching plant at Gedabek in H1 2013.

Anglo Asian is actively looking 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 base metal production company