Gedabek Project Update

18 Jun 2007 07:01

Anglo Asian Mining PLC18 June 2007 18 June 2007 ANGLO ASIAN MINING PLC ('Anglo Asian' or 'the Company') Gedabek Development Plan Feasibility Study Completed Anglo Asian Mining PLC (AIM:AAZ) the gold and copper development company withprojects in Azerbaijan, announces continued good progress on its Gedabek projectin West Azerbaijan. Feasibility Study The Company has completed a Feasibility Study on Gedabek, which shows thedevelopment of the property to be both economically viable and robust. The studyidentifies a mining reserve of 7.7 million tonnes of ore at grades of 1.80 gramsper tonne ('g/t') gold, 15.91 g/t silver and 0.29% copper. Gold, silver andcopper production over the mine life has been conservatively estimated to be311,154 oz of gold, 1,959,109 oz of silver and 17,424,960 lbs of copperrespectively. Under the JORC code this reserve is in the "probable" mineralreserve category. Additional ore is expected to be found from the inferred orewithin the current pit boundaries, extensions of the mineralisation alreadyidentified outside the pit and from old mine stockpiles produced from previousunderground mining. Capital costs are estimated at US$30.7 million, including US$3.1 million ofworking capital. The gross cash operating costs are estimated as US$283 per ozof gold (US$147 per oz net of copper and silver credits). Together with the lowcosts of operation and after metal credits, at current metal prices, the projectis expected to payback the capital investment within one year of productioncommencing. Analysis of the Gedabek project shows that the Company will receive63% of the pre-tax cashflows under the terms of the Production SharingAgreement. As described in earlier announcements, the application of heap leach technologyfrom a low strip open pit mine, combined with the SART(Sulphidation-Acidification-Recycle-Thickening) copper precipitation processremains the preferred recovery method for the project. CIL Plant and funding The Company is currently marketing the CIL plant which is packed and ready fortransport in Singapore. Negotiations with several interested prospective buyersare in process. It is expected that proceeds from the sale of the CIL plant willfund a substantial amount of the construction work planned for this year atGedabek. Following completion of the feasibility study, the Company is nowexploring various options to meet the capital requirements of the Group. Land and approvals Following the identification of land requirements in May of this year, thegovernment have already assigned sufficient municipality land to the Company tomeet c.78% of the total requirement. The remaining land, which is privatelyheld, is in the final stages of negotiation. Under the rules of the Production Sharing Agreement, the Company submitted aWork Plan and Budget on 28 May 2007 for the current year and a Development andProduction Programme is ready for submission for the Gedabek project. These areexpected to be approved in coming weeks. The Environmental Base-Line Study has been approved by the Ministry of Ecologyand Natural Resources, and the Environmental Impact Study was submitted forapproval on 11 June 2007. Approval is expected before the end of July of thisyear. A Mining Licence application is in preparation for submission to theMinistry of Emergency Situations, which is also responsible for explosives, minesafety and health. Construction of the main access roads into the mine, the leach pad area,earthworks and foundations for the plant and crushing facilities and shellbuildings are all planned for the mild weather conditions between August andDecember of this year. The mine is scheduled to finish the remainingconstruction during the second quarter and commence production in the thirdquarter of 2008. Commenting on the latest developments, Chief Executive Gordon Lewis stated, "Theresults of the study are excellent news for the Company and place it in a strongposition in the Republic of Azerbaijan. Gedabek will be the first significantgold mine in the country for several decades. These results bode well forAzerbaijan and are an indication of the economic potential of the region forgold and copper resources." -Ends- Mr Gordon Lewis has approved the content of this announcement. He is aprofessionally qualified mining engineer with over 30 years of relevantexperience in the mining industry and is a member of the Australasian Instituteof Mining and Metallurgy. -Ends- For further details, please contact: Anglo Asian Mining PLCGordon Lewis, Chief Executive +994 12 499 3350Richard Round, Finance Director +44 1525 211 988 Numis Securities LimitedJohn Harrison +44 20 7776 1590 Parkgreen CommunicationsJustine Howarth / Clare Irvine +44 20 7851 7480 This information is provided by RNS The company news service from the London Stock Exchange