Anglo Asian Exploration Update

22 February 2011
Anglo Asian Exploration Update

Notice of Discovery and Exploration Update

Anglo Asian Mining plc, the AIM listed gold producer, has submitted a Notice of Discovery for gold on its Gosha Contract Area and provides an update on exploration at its other two key Contract Areas, Gedabek and Ordubad, which also run across the Tethyan Tectonic Belt in Azerbaijan, one of the world's significant copper and gold bearing areas.

Overview

  • Notice of Discovery at Gosha Contract Area submitted - further exploration planned with a view to confirming a small gold deposit with production potential
  • Encouraging results at Gedabek Contract Area - a further 17,500 metres of drilling planned for 2011
  • Exploration results at Ordubad Contract Area demonstrate potential of targets that warrant further exploration

Gosha - Notice of Discovery

The submission of Notice of Discovery is a step to be taken before the technical and economical evaluation of a deposit in terms of a Development and Production Programme according to the Company's Production Share Agreement ('PSA') signed with the Government of Azerbaijan.

As a result of geological studies and exploration work performed by Anglo Asian during 2009 and 2010, the Company believes that one of the mineralisation zones at Gosha, designated during the Soviet time as Zone 13, has the potential to become a small narrow vein gold mining operation. Further information concerning the results of the studies and exploration work will be announced in the near future.

According to the terms of the PSA, following the submission of the Notice of Discovery, the Company has six months to submit a Development and Production Programme to the Government of Azerbaijan for approval.

Exploration Update at Gedabek and Ordubad


Gedabek Contract Area

Exploration activities within the Gedabek Contract Area included the undertaking of topographic surveys and geological mapping as well as a 9,500 metre diamond drilling programme. This has resulted in a new resource model and an increased resource at the Gedabek gold/copper mine ('Gedabek mine') area to 704,000 ounces of gold in the Measured and Indicated classifications as announced in October 2010; the discovery of a new prospect in the Cholpan area, 2 km north of the Gedabek mine; and the firming up of targets for a copper/gold deposit in the Maarif area of the Contract Area.

In addition, the Company recently completed a 6,000 metre diamond drill programme within the boundaries of the existing pit, aimed at increasing confidence in the resource of the Gedabek mine. The results of the drilling programme are expected within the first quarter of 2011.

Ordubad Exploration

A preliminary remote sensing study of the Ordubad Contract Area was conducted as well as adit cleaning and re-sampling of adits in two regions, Pyazbashi and Agyurt. Trenching and sampling was also undertaken in the Daste Bashi region. These activities have not shown any potential target area in Ordubad so far, however the Company believes that the Agyurt and Daste Bashi prospects warrant further exploration. The Company's license expires on 13 April 2011 and the Company is in the process of renewing the license for a further year.

Exploration Activities Planned For 2011


The Company has a defined exploration programme planned for 2011 aimed at extending the size of the discovery at Gosha, increasing the resource at the Gedabek mine, upgrading the deposit at the Maarif prospect at Gedabek to an indicated resource, and securing Ordubad for further exploration.

Following the initial discovery at Gosha, the Company aims to further extend the adits and is planning 1,500 metres of underground diamond drilling during 2011.

A further 17,500 metres of drilling is planned for the Gedabek Contract Area during 2011:

  • 7,500 metres will be drilled in an area that borders the existing mine and will concentrate on an area underground at a depth of 200 to 350 metres.
  • 3,000 metres of drilling is planned at Cholpan, a highly prospective area in close proximity to the existing mine.
  • 7,000 metres of drilling is planned at Maarif with the aim of defining an indicated resource. In 2009, 3,000 metres of drilling was undertaken which yielded encouraging results.


All exploration expenditure and plans at Gedabek are subject to approval of the Project Steering Committee, comprised of three representatives from the Company and three representatives from the Ministry of Ecology and Natural Resources.

Anglo Asian CEO Reza Vaziri said, "Exploration is a key part of our strategy as we strive to replicate the success of the Gedabek gold/copper mine in Azerbaijan, which in the fourth quarter of 2010 produced 19,555 ounces of gold, and create a mid tier mining company. As our discovery at Gosha as well as our other exploration activity highlights, we are confident that within our portfolio at least one if not more targets have the potential to host another mine. With this in mind, we are implementing an aggressive exploration programme during the course of 2011 and look forward to reporting on our progress."