Anglo Asian Mining Update

06 February 2013
Anglo Asian Mining Update

Anglo Asian Mining plc Company Gold Production Update

Anglo Asian Mining plc, the AIM listed gold producer in Azerbaijan, is pleased to provide guidance on the Company's expected gold production for the year to 31 December 2013 (FY 2013) at its flagship Gedabek gold/copper/silver mine ('Gedabek') in western Azerbaijan, and the Company's gold production target for the end of 2014 in view of Anglo Asian bringing its second mining project, Gosha in Azerbaijan, into development in 2013 and production by 2014.

Overview

  • New Agitation leaching plant on track to be commissioned in H1 2013 at Gedabek - expected to improve gold recoveries of oxides and sulphides to 85% and 69% respectively
  • Gold production from Gedabek for FY 2013 targeted to increase by approximately 20% to circa 60,000 ounces (2012: 50,215 ounces Au)
  • Average cash operating cost forecast to reduce in 2013 towards circa US$450-500 per ounce once new Agitation leaching plant has been commissioned
  • Continuing to advance work in its 300 sq km Gosha Contract Area with the intention to develop a profitable, high grade underground gold mine in Azerbaijan - development anticipated to commence H2 2013
  • Company total gold production by end of 2014 targeting between 80,000 and 90,000 ounces per annum


Anglo Asian CEO Reza Vaziri said, "We are delighted to announce Gedabek's gold production target for 2013 which should see production increase by about 20% for the period. This target has been set in view of the new Agitation Leaching Plant at Gedabek, which is expected to improve gold recoveries, starting its commissioning stage in H1 2013. In addition to this, the Company is actively developing its Gosha Contract Area, which is set to be Anglo Asian's second mining operation in the country. The Gosha gold project, which is only 50km away from Gedabek, will commence development in H2 2013, with a view to first production by 2014. Ore from Gosha will be trucked to Gedabek and processed through the new agitation leach plant. With this in mind, we are confident that Anglo Asian's gold production will increase towards 90,000 ounces per annum by the end of 2014, which when realised, would further consolidate our position as a leading mid-tier gold company in Caucasia."

Full Details

Anglo Asian's flagship Gedabek mine in western Azerbaijan produced a total of 50,215 ounces of gold and 20,133 ounces of silver from its heap leach operations for the year ending 31 December 2012. In addition to this, it also produced 502 tonnes of copper from its Sulphidisation, Acidification, Recycling and Thickening ('SART') plant. For the years 2013 and 2014, as per the Production Sharing Agreement, the Government of Azerbaijan is entitled to 12.75% of the commercial products of each mine, with the Company taking the remaining 87.25%.

In terms of 2013 gold production, the Board and management team is pleased to announce a target of circa 60,000 ounces of gold for the year at Gedabek. This target has been set in anticipation of the commissioning of the new Agitation Leaching plant at Gedabek in H1 2013, which is expected to initially treat 100 tonnes of ore per hour and to increase gold production of oxides and sulphides to 85% and 69%, respectively. Additionally, the average operating costs of Gedabek are expected to reduce once the Agitation Leaching Plant is on line, and are expected to be circa US$450-500 per ounce for FY 2013.

Looking ahead, the Company is committed to establishing a second mining operation in Azerbaijan. Anglo Asian's Gosha Contract Area ('Gosha') is located 50km away from Gedabek and is currently being advanced with a view to develop a profitable, high grade underground gold mine in Azerbaijan, which is expected to produce circa 15-20,000 ounces of gold per annum once in production. Mining development of Gosha is targeted to begin in H2 2013 with the intention to start production in 2014. This, in tandem with the anticipated increase in gold production at Gedabek from its new Agitation Leaching Plant, is expected to see Anglo Asian's total gold production rising to between 80,000 and 90,000 ounces by the end of 2014, subject to both the Gosha mine and the Gedabek Agitation Leaching Plant operating as expected.