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Anglo Asian Mining PLC (ISE:AAZ)

Anglo Asian Mining PLC (ISE:AAZ)


Share Price
72.00 p
Change
-2 (-2.70 %)
Market Cap
£82.36 m
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Anglo Asian Mining PLC RNS Release

Launch of 2018 Exploration Programme


RNS Number : 4693H
Anglo Asian Mining PLC
13 March 2018
 

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

 

13 March 2018

Anglo Asian Mining plc

Geological exploration programme for 2018

 

Launch of wide ranging geological exploration and evaluation programme to both extend current mine life and increase production

                                                                                           

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to announce its geological exploration and evaluation programme for 2018.

 

Note that all references to "$" are to United States dollars.

 

Overview

 

·    2018 to be the first year of a three-year rolling programme of geological exploration of near mine, brownfield and greenfield areas with the objective of:

o replacing mined ounces

o extending the current mine life to a 10-year minimum

o increasing the Company's inventory of resources

o discovering new mineral deposits similar to the Ugur open pit mine ("Ugur") which have the potential to be quickly developed into operating mines

·    The programme will build on the results of the 2017 geological work and comprehensively cover the Company's three operating contract areas:

o Gedabek gold, copper and silver contract area ("Gedabek") in western Azerbaijan which is the location of the Gedabek and Ugur mines and the Gadir underground mine ("Gadir");

o Gosha contract area ("Gosha") which is located 50 kilometres from Gedabek; and

o Ordubad contract area ("Ordubad") which is located in Nakhichevan, South West Azerbaijan

·    A total of around 43,500 metres of surface and underground drilling is planned

·    One reverse circulation and two core drill rigs to be purchased as part of the programme

·    Airborne geophysics programme planned for the entire Gedabek contract area

·    Database management and modelling will continue to meet requirements for JORC resource and reserve statements

·    Expected cost of programme in 2018 to be approximately $6 million which will be funded from internal cash flow

 

 

Anglo Asian CEO Reza Vaziri commented, "I am very pleased to announce this programme of geological exploration of our three operating contract areas. This will build upon the success of the previous few years during which time we discovered the Ugur and Gadir deposits. In addition to demonstrating that our exploration can produce results, we have importantly shown that we can quickly produce value from any new discoveries as exemplified by Ugur, which we brought into production in less than 12 months from discovery.

 

"I look forward to updating our shareholders during the year on the results of the programme."

 

Anglo Asian Group Director of Geology & Mining Stephen Westhead commented, "I am very excited to be able to roll out this programme of geological exploration and mineral deposit evaluation. In addition to an extensive drilling programme, we will carry out an airborne geophysical survey over the entire Gedabek contract area and also investigate the potential of Gosha and Ordubad. The purchase of three drill rigs will also significantly add to the Company's ability to carry out in-house exploration.

 

"There are numerous known mineral occurrences at Gedabek and our existing mines have further development potential. We have also made significant finds of commercially exploitable minerals in the previous few years. Taken together, this leads us to believe this programme has the potential to significantly add value to your company especially given our proven ability to convert mineral exploration results into resources and reserves and fast track mine construction."

 

Details

 

Overview of exploration programme

The geological programme is designed to extensively explore Gedabek through a three-year rolling programme. In addition, work will be carried out at Gosha and Ordubad to further evaluate their potential.

 

Geological evaluation at Gedabek will be undertaken using various methods. Core and reverse circulation drilling will be carried out at, and near to, existing mines. Geological field mapping and sampling and trenching will also be carried out at more prospective areas. A heli-borne electromagnetic survey will be completed covering the entire Gedabek site. In 2018, it is anticipated that around 12,000 metres of reverse circulation, 17,500 metres of surface core and 14,000 metres of underground core drilling will be carried out.   

 

Extensive use will be made of the Datamine suite of geological software tools to carry out this programme. These will be operated by Anglo Asian employees, following appropriate training, in conjunction with staff from Datamine International.

 

The work programme for 2018 is based on the extensive exploration work that was carried out during 2017, a period when the new Ugur mine was being built and production from the main Gedabek open pit and the Gadir underground mine was temporarily halted. 

 

Main exploration activities at Gedabek

 

Gedabek main open pit

2,500 metres of core and 7,500 metres of reverse circulation drilling are planned for 2018. The main purpose is to identify the quantity and quality of the feedstock for the processing plants.

 

Gedabek underground

During 2017, a tunnel was constructed from Gadir to the mineralisation below pit 4 of the Gedabek main open pit. Mineralisation was intersected during the tunnelling and drill holes of BQ size were drilled at the end of the tunnel to determine the presence of mineralisation under the main pit. The results were positive and confirmed the down dip continuity of mineralisation from the Gedabek main open pit.

 

Given the mineralisation intersected, in 2018 it is planned to extend the tunnel beneath the "backwall" of the Gedabek main open pit to Pit 6 and to exit via a spiral ramp into the vicinity of Pit 1. Cross-cut tunnels will then be driven through the mineral zones to allow for the construction of drilling chambers. Fan drilling by underground core drilling will then be carried out to assess the quantity and quality of mineralisation. A total of approximately 5,750 metres of underground core drilling is planned.

 

Gadir

Both surface and underground drilling are planned. 7,500 metres of core surface drilling is planned in 2018 for both Gadir itself and between Gadir and the main open pit. The objective is to further define the footprint geology of Gadir and assess the geological relationship between Gadir and Gedabek mineralisation. 6,000 metres of underground core drilling (HQ/NQ size) and 2,400 metres of underground core drilling (BQ size) is also planned. The main purpose of the drilling is to provide geological data for the evaluation of the continuity of mineralisation and for planning in advance of mining.

 

Ugur

4,500 metres of core and 4,500 metres of reverse circulation drilling are planned for 2018. Targets to be assessed are extensions to the known mineralisation and drilling areas adjacent to the current mining area. Field mapping and geochemical surveying will also be conducted.

 

Airborne geophysical survey of Gedabek

A heli-borne electromagnetic survey will be carried out over the entire Gedabek contract area in 2018. The survey will employ the Z-Axis Tipper Electromagnetic system (ZTEM). This is an innovative airborne electromagnetic surveying system which uses the natural magnetic field of the Earth.  The system is an excellent mapper of surface geology and is deeply penetrating and well suited to rugged topography. This method is especially suitable for porphyry copper-gold and epithermal copper-gold-silver exploration.

 

The airborne survey will provide data about geophysical anomalies arising from mineral trends and occurrences. These will be analysed and prospective targets will be identified. The geophysical "signatures" of known deposits such as Ugur will assist identifying targets. Potential targets will be followed up with other ground-based geophysical investigative techniques including geological mapping, geochemical surveys and drilling. Depending on results, airborne surveys may be employed in the future at the Company's other contract areas.

 

Gosha

3,000 metres of core drilling is planned to explore for gold veins supported by geological mapping, outcrop sampling and geochemical sediment sampling.

 

Ordubad

Based on the results in 2017, an initial surface exploration programme is planned in 2018 to identify porphyry style mineralisation and its relationships with the known gold vein deposits of the area. This will include geological mapping, outcrop sampling, stream sediment sampling and follow-up trenching to provide multi-element geochemical mapping to define alteration zones known to occur with this style of mineralisation. Based on new knowledge, existing core drill data will be reinterpreted. Depending on the results in 2018 an aerial electromagnetic survey and follow-up drilling programme may be carried out in the future.

 

Cost of the programme

The estimated cost in 2018 for the geological exploration programme is $6 million.  This includes $1.5 million for the purchase of one reverse circulation and two underground core drill rigs. The entire programme will be funded from the Company's internal cash flow.

 

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:

 

Reza Vaziri

Anglo Asian Mining plc

Tel: +994 12 596 3350

Bill Morgan

Anglo Asian Mining plc

Tel: +994 502 910 400

Stephen Westhead

Anglo Asian Mining plc

Tel: +994 502 916 894

Ewan Leggat

SP Angel Corporate Finance LLP

Nominated Adviser and Broker

Tel: +44 (0) 20 3470 0470

Soltan Tagiev

SP Angel Corporate Finance LLP

Tel + 44 (0) 20 3470 0470

Susie Geliher

St Brides Partners Ltd

Tel: +44 (0) 20 7236 1177

Lottie Wadham

St Brides Partners Ltd

Tel: +44 (0) 20 7236 1177

 

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 kilometer area in the lower 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, 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 71,461 gold equivalent ounces ('GEOs') for the year ended 31 December 2017.  Gedabek is a polymetallic project which demonstrates a high copper content at the main open pit mine, and an oxide gold-rich zone at Ugur.  The Company therefore employs a series of flexible processing routes through which to optimise 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, which is processing tailings from the agitation leach plant. A second dedicated crusher line is also currently being installed for the flotation plant to enable it to operate independently of the agitation leaching plant.

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.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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