Anglo Asian Mining : Interim results 2022

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

15 September 2022

Anglo Asian Mining plc

Interim Results for the six-months to 30 June 2022

FY 2022 Production Guidance at 54,000 to 58,000 gold equivalent ounces

Interim Dividend for 2022 of US 4 cents per ordinary share

Anglo Asian Mining plc ("Anglo Asian", the "Company" or the "Group"), the AIM-listed copper, gold, and silver producer in Azerbaijan, is pleased to announce its interim results for the six- months ended 30 June 2022 ("H1 2022").1 The Group has achieved encouraging progress in a difficult external environment. Anglo Asian is pleased to announce its full year 2022 ("FY 2022") production guidance of 54,000 to 58,000 gold equivalent ounces ("GEOs").

The Company also announces its 2022 interim dividend of US 4 cents per ordinary share payable on 3 November 2022 to shareholders on record on 30 September 2022.

Financial highlights

• Total revenues of $31.5 million (H1 2021: $43.5 million)

1. Lower gold doré sales of 11,273 ounces (H1 2021: 19,582 ounces) partially offset by

higher average gold sales price of $1,901 per ounce (H1 2021: $1,776 per ounce)

• 1. Unsold gold inventory on 30 June 2022 of $13.0 million valued at the market price on that date
• Profit before taxation of $5.7 million (H1 2021: $5.9 million)
• 1. Profit before taxation includes a total charge of $1.6 million in respect of Libero Copper & Gold Corporation ("Libero") which became an associate company of the Group in January 2022
• All-insustaining cost ("AISC") of gold production increased to $983 per ounce (H1 2021: $848 per ounce)
• 1. Total costs were broadly flat as higher electricity and material costs were offset by lower cyanide usage but lower gold production resulted in a higher AISC per ounce
• Free cash flow was a net outflow of $13.2 million (H1 2021: $0.4 million) due to an increase in working capital of $17.2 million mainly due to unsold gold inventory at 30 June 2022
• Cash of $21.2 million as at 30 June 2022 (31 December 2021: cash of $37.5 million) and the Company remains debt free
• 2022 interim dividend declared of US 4 cents per ordinary share

1 Note that all references to "$" and "cents" are to United States dollars and cents, "CAD$" and "CAD cents" are to Canadian dollars and cents and "£" and "pence" are to Pound Sterling.

1. Dividend modestly increases the pay-out in Sterling at current exchange rates due to the depreciation in the value of the pound Sterling against the US dollar

Operational highlights

• Total production of 28,772 GEOs (H1 2021: 32,171 GEOs) due to lower gold grades at Gedabek
  o Gold production of 20,906 ounces (H1 2021: 24,247 ounces)
  o Copper production of 1,283 tonnes (H1 2021: 1,333 tonnes)
  o Silver production of 99,499 ounces (H1 2021: 78,980 ounces)
• Gold bullion sales of 11,273 ounces (H1 2021: 19,582 ounces) completed at an average
  price of $1,901 per ounce (H1 2021: $1,776 per ounce)
• Excellent progress made at Zafar towards commencing mining next year

1. Final JORC ore resource published in March 2022

• 1. Location of portal established and acquisition of the mining fleet underway
  1. First new centrifugal flotation cell for zinc production line under test
• Good progress at Vejnaly and Gosha
• 1. Mine camp now established at Vejnaly and activity ramping up

• 1. Underground tunnelling towards new Hasan vein at Gosha nearing completion
• FY 2022 production guidance of between 54,000 to 58,000 gold equivalent ounces
• 1. Production from Hasan and Vejnaly should result in production at the upper end of the guidance range, rather than increasing the upper end of the potential total production

Post-period highlights

• The Company's revised production sharing agreement became law in Azerbaijan, granting the Company three new contract areas
  o The new Garadagh, Xarxar and Demirli contract areas underpin the Company's growth strategy and ambition to become a mid-tier,copper-focused miner
  o A detailed review of the previous exploration and other data for Garadagh and Xarxar is underway and will be published as part of our 3 to 5 year growth strategy
  o New portal constructed at Xarxar and tunnelling commenced immediately
• Share buyback of 100,000 shares bought at an average price of 85.625 pence per share
• Further investment in Libero of $0.8 million during a fundraise which maintained our shareholding at 19.9 per cent.
• With great sadness and regret the Company announces the first fatality in its history at the Xarxar contract area
  o An external investigation has cleared the Company of any blame for the accident and mining and exploration activities have not been affected by this tragic incident

Anglo Asian CEO Reza Vaziri commented:

"I am pleased to report these interim results for 2022. The Company produced 28,722 gold equivalent ounces during the period, down slightly versus last year, although this was

expected due to lower gold grades at Gedabek. We are pleased to announce our full year production guidance of 54,000 to 58,000 gold equivalent ounces. We are expecting a modest amount of production from Vejnaly and the Hasan vein at Gosha this year so anticipate an outcome at the upper end of the guidance. I am also very pleased to announce an interim dividend of four United States cents per share. For the majority of our shareholders, who are based in the United Kingdom, this will be an increase in their Sterling interim dividend at current exchange rates.

"We made significant progress in the development of our portfolio with excellent progress made at Zafar, Vejnaly and Hasan, all of which will enter production in the next 3 to 12 months. This will ease our reliance on production from Gedabek as they are set to produce meaningful quantities of ore next year.

"This is an exciting time for Anglo Asian Mining, with the acquisition of our three new contract areas. These will transform our business and are substantial drivers for growth. We are in the process of further developing our growth strategy which I look forward to publishing later in 2022."

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, which was incorporated into UK law by the European Union (Withdrawal) Act 2018, until the release of this announcement.

For further information please 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	Tel: [phone]
Adam Cowl	Nominated Adviser and Broker
Charlie Jack	Hudson Sandler	Tel: [phone]
Harry Griffiths

Chairman's Statement

Dear Shareholders

I am delighted to present our Interim Results for 2022. Our operations delivered a solid performance in the period, with total production of 28,772 GEOs, in line with our expectations. Production was slightly weaker than last year due to lower gold grades at Gedabek.

Our full year production guidance is now reaffirmed at the upper end of the range between 54,000 to 58,000 gold equivalent ounces and the Company remains in a strong financial position. Accordingly, the board is pleased to declare an interim dividend for 2022 of US 4 cents per ordinary share, reflecting our underlying confidence in the business and its growth prospects.

We have made significant progress in the year despite the adverse environment. We were delighted that our revised production sharing agreement was passed into law in July 2022 with the resulting acquisition of Xarxar, Garadagh and Demirli. This is a major milestone for the Company and now underpins our growth plans. We subsequently acquired the historical geological and other data for Garadagh and Xarxar, which is currently being analysed.

We also made considerable progress with our other mining properties. We have established a mine camp at Vejnaly and mining will commence later this year. The final JORC mineral resource for Zafar was published, mine planning is proceeding at pace and mining will commence next year. Our exploration programme continues to yield results with the announcement of another new discovery in the year, "Hasan", a narrow gold vein accessible from our existing Gosha mine.

We increased our investment in Libero in January 2022 which became an associate company of the Group. Libero is a mineral exploration company that holds a portfolio of exciting porphyry copper deposits throughout the Americas. This is the first international investment the Group has completed and reflects our ambition of mid-tier copper status and to operate beyond Azerbaijan. We have so far been encouraged by the developments across Libero's portfolio and Anglo Asian will provide invaluable expertise in developing their projects.

The Company's Annual General Meeting ("AGM") took place on 23 June 2022, and we were delighted to hold this in-person. The directors were pleased to have the opportunity to meet shareholders again and we look forward to continuing to engage with all stakeholders throughout the rest of the year and into 2023.

We executed share buybacks following approval by shareholders at the Company's recent AGM and General Meeting. We aim to opportunistically buy back shares when we believe they are undervalued by the market. The shares will be held in treasury and be available for resale. This will enable institutional investors to acquire a meaningful investment in the Company. This is currently very difficult in the open market due to the very low liquidity of our shares. To date, 100,000 shares have been acquired at an average price of 85.625 pence.

It is with great sadness and regret that I must announce that the Company experienced its first employee fatality in early July. An employee lost control of a loader he was driving up a hill at Xarxar and was killed in the resulting accident. An external investigation has cleared the Company of any blame for the incident. Anglo Asian remains committed to the upmost

standards of health and safety for all our employees, and we continue to offer our full support to the family of the bereaved to whom we extend our deepest condolences.

Our strategy for the Group remains unchanged. Our near-term focus continues to be increasing production at our currently active contract areas of Gedabek, Gosha and Vejnaly. Longer-term Garadagh, Demirli and Libero have significantly increased our exposure to copper and are key growth drivers. We have made considerable progress with this strategy during the year, and we look forward to advancing this progress in the coming months and years.

I would like to extend my sincere gratitude to all Anglo Asian employees, partners and the Government of Azerbaijan for their continued support in what continue to be challenging times. I also wish to thank our shareholders for their unwavering support of Anglo Asian Mining.

Khosrow Zamani

Non-executive chairman

14 September 2022

Chief Executive Officer's Review

I am pleased to report the results on Anglo Asian's 2022 interim performance. We held cash on 30 June 2022 of $21.2 million, with revenues of $31.5 million and profit before taxation of $5.7 million. I am particularly pleased with the progress across our portfolio of assets during the year with significant exploration and development milestones reached.

Operational Review

Total production during the period was 28,772 gold equivalent ounces, which was a decline compared to 2021, but this was expected, due to lower grades at Gedabek. Our existing mines at Gedabek are currently our main operational assets, but we look forward shortly to bringing additional mines into production to counteract the declining production of these older mines.

In March, we announced the discovery of Hasan at Gosha, a new sub-vertical gold vein discovered by surface drilling towards the south of the main mine. There are significant operational synergies to be realised, as the vein is easily accessible from the existing network of underground tunnels at Gosha. Activity at Vejnaly has also ramped up, with land clearance activities now completed and staff permanently based on site. Production at Hasan and Vejnaly is due to commence before the end of the year and will provide meaningful quantities of ore from 2023.