Anglo Asian Mining : Q1 2019 Production and Operations Review

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

10 April 2019

Anglo Asian Mining plc

Q1 2019 Production and Operations review

11 per cent. Increase in Year-on-Year Production and Increase in Net Cash to $10.8 million

Anglo Asian Mining plc ('Anglo Asian' or the 'Company'), the AIM listed gold, copper and silver producer focused in Azerbaijan, is pleased to provide a production, sales and operations review for its Gedabek gold, copper and silver mining and production contract area ('Gedabek') in western Azerbaijan for the three months to 31 March 2019 ('Q1 2019').

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

Overview

· 11 per cent. increase in year-on-year ('y-o-y') gold equivalent ounce ('GEOs') production to 20,287 GEOs (Q1 2018: 18,307 GEOs)

· Gold production increased by 5 per cent y-o-y to 17,245 ounces (Q1 2018: 16,491 ounces) due to increased gold production by flotation

· Doubled y-o-y copper production to 513 tonnes (Q1 2018: 255 tonnes) due to flotation processing operating throughout the quarter in parallel with gold doréproduction by leaching

· The landmark total of 20 metric tonnes of gold equivalent produced by Gedabek since commencement of operations in 2009 was achieved during the quarter

· 77 per cent. increase in net cash to $10.8 million at 31 March 2019 (31 December 2018: $6.1 million)

· Gross cash of $17.7 million at 31 March 2019 (31 March 2018: $8.6m)

Anglo Asian CEO Reza Vaziri commented, 'I am again very pleased to report an excellent quarter's production. The first quarter of the year is historically the poorest quarter of the year due to winter weather, so an 11 per cent. year-on-year increase, including a doubling of copper production demonstrates excellent performance. I am also very pleased to report that over 20 metric tonnes of gold equivalent have now been produced since the Company started operations at Gedabek in 2009. Notably, the Company continues to generate cash with our net cash balance increasing by $4.7 million despite a $3 million payment of corporate taxation in the quarter.'

Production overview

· 11% year-on-year increase in GEO production to 20,287 GEOs (Q1 2018: 18,307 ounces)

· 5% year-on-year increase in gold production to 17,245 ounces (Q1 2018: 16,491 ounces):

o15,547 ounces contained within gold doré

o11 ounces from SART processing

o1,687 ounces from flotation

· Copper production for Q1 2019 totalled 513 tonnes (Q1 2018: 255 tonnes):

o63 tonnes from SART processing

o450 tonnes from flotation processing

· Silver production for Q1 2019 totalled 51,295 ounces (Q1 2018: 40,583 ounces):

o6,634 ounces contained within gold doré

o16,370 ounces from SART processing

o28,461 ounces from flotation

Sales overview

· Q1 2019 gold bullion sales of 13,121 ounces at an average of $1,306 per ounce (Q1 2018: 14,956 ounces at an average of $1,328 per ounce)

· Q1 2019 copper concentrate shipments to the customer totalled 279 dry metric tonnes ('dmt') with a sales value of $0.7 million (excluding Government of Azerbaijan production share) (Q1 2018: 608 dmt with a sales value of $1.8 million)

Company financials

· Net cash, being cash less interest-bearing loans and borrowing equivalents, totalled $10.8 million at 31 March 2019 ($6.1million at 31 December 2018)

Operations review

The Company mined the following ore in the 3 months ended 31 March 2019:

	12 months to 31 December 2018		3 months to 31 March 2019
Mine	Ore mined	Average gold grade	Ore mined	Average gold grade
	(tonnes)	(g/t)	(tonnes)	(g/t)
Open pit	362,412	1.06	447,496	0.73
Ugur - o/pit	1,242,877	1.27	212,788	1.88
Gadir - u/g	125,878	4.52	40,020	2.84
Gosha - u/g	10,988	3.44	-	-
Total	1,742,155	1.47	700,304	1.20

As previously reported, low grade ore (less than 1.5 grammes per tonne of gold) is being treated by heap leaching, whilst higher grade ore (more than 1.5 grammes per tonne of gold) is being processed through the agitation leaching plant.

Anglo Asian stacked 127,990 tonnes of dry crushed ore on to heap leach pads with an average gold content of 0.80 grammes per tonne of gold (Q4 2018: 154,901 tonnes with an average gold content of 0.81 grammes per tonne of gold) in Q1 2019. The Company also heap leached uncrushed Run of Mine ('ROM') ore. During Q1 2019, Anglo Asian stacked 133,194 tonnes of ROM ore on to heap leach pads with an average gold content of 0.51 grammes per tonne of gold (Q4 2018: 131,861 tonnes with an average gold content of 0.48 grammes per tonne of gold).

The Company processed 171,211 dry tonnes of ore with an average gold content of 2.5 grammes per tonne of gold through the agitation leaching plant (Q4 2018: 173,332 dry tonnes with an average gold content of 2.26 grammes per tonne of gold) in Q1 2019. 130,012 dry tonnes of ore containing an average copper content of 0.49 per cent. were processed by the flotation plant Q1 2019 (Q4 2018: 129,946 dry tonnes of ore containing an average copper content of 0.53 per cent.).

The Company produced gold doré containing 15,547 ounces of gold and 6,633 ounces of silver at Gedabek (Q4 2018: 15,444 ounces of gold and 5,646 ounces of silver) in the quarter. During Q1 2019, the agitation leaching plant produced 12,649 and 5,345 ounces of gold and silver, respectively, and the heap leach operations produced 2,898 and 1,288 ounces of gold and silver, respectively.

SART processing produced 142dmt of copper concentrate containing 63 tonnes of copper, 11 ounces of gold and 16,370 ounces of silver in Q1 2019 (Q4 2018: 109 dmt of copper concentrate containing 67 tonnes of copper, 13 ounces of gold and 14,229 ounces of silver).

In Q1 2019, flotation processing produced2,871 dmt of copper concentrate containing 450 tonnes of copper, 1,687 ounces of gold and 28,461 ounces of silver (Q4 2018,3,557 dmt of copper concentrate containing 521 tonnes of copper, 2,752 ounces of gold and 45,947 ounces of silver).

The Company sold 279 dmt of copper concentrate in Q1 2019 for $0.7 million compared to 3,774 dmt for $6.1 million in Q4 2018(excluding Government of Azerbaijan production share). Sales were significantly lower than production due to logistical issues of the off-taker which are being resolved.

The following table summarises gold doré production and sales at Gedabek for FY 2018 and Q1 2019:

	Gold produced* (ounces)		Silver Produced* (ounces)		Gold sales** (ounces)		Gold Sales price ($/ounce)
Quarter ended
31 March 2018	15,750		7,110		14,956		1,328
30 June 2018	15,537		6,014		10,822		1,307
H1 2018	31,287		13,124		25,778		1,319
30 Sept 2018	18,885		7,416		18,637		1,216
31 Dec 2018	15,444		5,646		15,066		1,231
H2 2018	34,329		13,062		33,703		1,223
FY 2018	65,616		26,186		59,481		1,265
31 March 2019	15,547		6,634		13,121		1,306
NOTE

* including Government of Azerbaijan's share

** excludes Government of Azerbaijan's share

The following table summarises copper concentrate production from both its SART and flotation plants for FY 2018 and Q1 2019:

	Concentrate	Copper	Gold	Silver
	production*	content*	content*	content*
	(dmt)	(tonnes)	(ounces)	(ounces)
2018
Quarter ended 31 March
SART processing	223	114	6	22,118
Flotation	819	141	735	11,587
Total	1,042	255	741	33,705
Quarter ended 30 June
SART processing	260	137	6	21,800
Flotation	1,136	195	1,226	16,387
Total	1,396	332	1,232	38,187
Quarter ended 30 Sept
SART processing	162	81	7	17,357
Flotation	2,501	389	2,437	34,573
Total	2,663	470	2,444	51,930
Quarter ended 31 December
SART processing	109	67	13	14,229
Flotation	3,557	521	2,752	45,947
Total	3,666	588	2,765	60,176
2019
Quarter ended 31 March
SART processing	142	63	11	16,370
Flotation	2,871	450	1,687	28,461
Total	3,013	513	1,698	44,831

* including Government of Azerbaijan's share.

Note that certain amounts for flotation production maybe different to those previously disclosed due to final reconciliation of production and sales.

The following table summarises total copper concentrate production and sales at Gedabek for FY 2018 and Q1 2019. Note that sales of concentrates are initially recorded at provisional amounts until agreement of final assay:

	Concentrate	Copper	Gold	Silver	Concentrate	Concentrate
	production*	content*	content*	content*	sales**	sales**
	(dmt)	(tonnes)	(ounces)	(ounces)	(dmt)	($000)
Quarter ended
31 March 2018	1,042	255	741	33,705	608	1,715
30 June 2018	1,396	332	1,232	38,187	1,736	4,221
H1 2018	2,438	587	1,973	71,892	2,344	5,936
30 Sept 2018	2,663	470	2,444	51,930	1,557	3,368
31 Dec 2018	3,666	588	2,765	60,176	3,774	6,131
H2 2018	6,329	1,058	5,209	112,106	5,331	9,499
FY 2018	8,767	1,645	7,182	183,998	7,675	15,435
31 March 2019	3,013	513	1,698	44,831	279	718

* including Government of Azerbaijan's share.

** excluding Government of Azerbaijan's share.

Note that certain figures maybe different to those previously disclosed due to final reconciliation of concentrate production and sales.

Company financial review

Net cash

The Company had net cash at 31 March 2019 of $10.8 million, an increase of $4.7 million since 31 December 2018.

	$m
Cash on hand and at bank	17.7
Pasha Bank refinancing loan	(6.7)
Letter of credit for cyanide purchase	(0.2)
Net cash	10.8

The Company paid corporation taxation of $3.0 million in Q1 2019.

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 visitwww.angloasianmining.comor contact:

Reza Vaziri	Anglo Asian Mining plc	Tel: [phone]
Bill Morgan	Anglo Asian Mining plc	Tel: [phone]
Stephen Westhead	Anglo Asian Mining plc	Tel: [phone]
Ewan Leggat	SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel: [phone]
Soltan Tagiev	SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel + 44 (0) 20 3470 0470
Susie Geliher	St Brides Partners Ltd	Tel: [phone]
Lottie Wadham	St Brides Partners Ltd	Tel: [phone]

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 kilometre area in the Lesser Caucasus mountains in western Azerbaijan. The Company developed Azerbaijan's first modern 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 83,736 gold equivalent ounces ('GEOs') for the year ended 31 December 2018. Gedabek is a polymetallic ore deposit that has gold together with significant concentrations of copper in the main open pit mine, and an oxide gold-rich zone at Ugur. The Company therefore employs a series of flexible processing routes to optimise metal 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. A second dedicated crusher line has been commissioned and is now in operation for the flotation plant to enable it to operate independently of the agitation leaching plant.

The Company has forecast metal production for FY 2019 of between 82,000 to 86,000 gold equivalent ounces ('GEOs'). Of the forecast production for FY 2019, between 28,000 to 30,000 GEOs is in the form of copper and gold flotation concentrate.

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.