REG - Anglo Asian Mining - 300,000 plus tonnes of copper defined at Garadag
27/03/2023 07:00
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RNS Number : 2303U Anglo Asian Mining PLC 27 March 2023
27 March 2023
Anglo Asian Mining plc
300,000 plus tonnes of copper defined at Garadag
Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold,
copper and silver producer primarily focused in Azerbaijan, is pleased to
announce that an initial assessment of data relating to the Garadag porphyry
copper deposit (the "Garadag Deposit") confirms the potential to produce over
300,000 tonnes of copper.
Anglo Asian acquired historic geological data from AzerGold CJSC (the "Data")
relating to the Garadag Deposit, which is hosted within the Garadag contract
area and located north of the Company's Gedabek and Xarxar contract areas.
This initial assessment by the Company has not been prepared according to the
JORC Standard. The Company intends to prepare a mineral resource estimate
using the JORC procedures on completion of the evaluation programme, targeting
mid-2024 for the preparation of the mineral resource estimate according to the
JORC code.
Stephen Westhead, Vice-President of Anglo Asian, commented:
"Garadag hosts very significant quantities of copper. It has the potential to
meaningfully increase our production profile and alone provides us with
considerable copper mineralisation. It is an important addition to the
Company's growing portfolio of copper assets.
"While only a preliminary assessment, we are incredibly excited by Garadag's
development potential, and believe it can produce between 20,000 to 25,000
tonnes of copper per annum. We are currently conducting further validation
processes to provide additional confidence, including producing a
JORC-compliant mineral resource estimate."
The Garadag contract area
The Garadag contract area (Figure 1), which was granted to the Company in July
2022, has an area of 344 square kilometres and is located 16 kilometres to the
north-north-east of the Gedabek processing facilities. In August 2022, the
Company acquired drill core, assays and other data about Garadag and the
nearby Xarxar mineral occurrence from AzerGold CJSC. The Data include
historical drilling results from exploration carried out during the Soviet
era, as well as more modern work undertaken by the two previous owners of
Garadag, namely Aimroc Ltd. and, most recently, AzerGold CJSC. The roads built
for drill access are accessible and serviceable on Garadag (Figure 2).
Figure 1: Garadag and adjacent contract area boundaries of Anglo Asian showing
the position of ongoing projects (source: Google Earth).
The Data
A summary of the drill hole results in the Data is tabulated below:
Drilling Number of drill holes Total length Number of samples
Period
Adit Vertical Inclined Total (metres) (metres)
Soviet 129 129 35,140 13,776
Soviet adit 5 5 2,055 953
Aimroc 12 3 15 7,206 6,887
AzerGold CJSC 108 16 124 23,454 8,199
Total 5 249 19 273 67,855 29,815
The 23,454 metres of drill core and core samples of the AzerGold CJSC drill
campaign have all been transferred to Anglo Asian.
Figure 2: The Garadag deposit location
In addition to drill hole and assay data, Anglo Asian also received the
following data and information: Soviet era and Azerbaijan exploration
geological maps; geophysics (induced polarisation "IP" and magnetic) survey
data; and preliminary three-dimensional geological models. Various technical
reports were also received, which are listed in Appendix one.
Mineral resources of the Garadag Deposit
The first mineral resource estimate of the Garadag Deposit was produced during
the Soviet era dated 01 January 1992. It contained over 318,000 tonnes of
copper under the Soviet Standard of resource classification and is tabulated
below:
Copper content
Unit Category C1 Category C2 Total C1 and C2
Ore Millions of tonnes 25.35 23.69 49.04
Copper content Thousands of tonnes 168 150.7 318.7
Grade Per cent. 0.65 0.64 0.64
AzerGold CJSC contracted with various international consultancies to work on
the mineral resource estimation, in-pit resources and metallurgical testwork.
All AzerGold CJSC samples were assayed and analysed by the international
group, ALS. AMC Consultants PTY Ltd ("AMC") provided resource estimation
services and Bureau Veritas Minerals PTY Ltd ("BV") were commissioned to carry
out metallurgical testwork.
AMC prepared a Garadag pit optimisation and design study in February 2020 and
developed two open pit scenarios, one mining over 43 million tonnes of ore
(containing 163,000 tonnes of copper) over a 9 year period and the other
mining over 90 million tonnes of ore (containing 307,000 tonnes of copper)
over an 18 year period. These results partially confirmed the presence of over
300,000 tonnes of in-situ copper within an open pit shell.
Anglo Asian carried out mineral resource estimation based on geostatistical
techniques and three-dimensional modelling on data received from AzerGold
CJSC, constrained by the larger of the AMC pit shells (referenced in the
paragraph above). This showed an "Indicated" plus "Inferred" mineral resource
of over 66.3 million tonnes of ore at 0.49 per cent. copper, containing some
324,688 tonnes of copper, which further confirmed the copper potential of the
Garadag Deposit. The database developed by Anglo Asian needs to be fully
validated and further check drilling and confirmation of data will be carried
out. The Company's preliminary mineral resource estimate, although utilising
geostatistical methods according to JORC guidelines, requires further work to
satisfy the JORC Standard requirements and is therefore not prepared to JORC
Standard. The Company intends to prepare a mineral resource estimate to the
JORC Standard on completion of the evaluation programme.
The Company carried out further mineralisation modelling within a 0.1 per
cent. copper shell to determine the full potential of the Garadag deposit. The
amount of mineralisation, resultant copper per cent. and contained copper were
estimated using a range of cut-off grades. The results are tabulated below.
Grade-tonnage relationship results above elevation of 1,000 metres level
(average depth from surface ~500 metres)
Cut-off Mineralisation (tonnes) Resultant Grade (Cu %) Metal
(Cu %) (Cu tonnes)
0.10 728,060,777 0.25 1,820,152
0.20 406,595,477 0.33 1,341,765
0.30 191,070,264 0.43 821,602
0.40 88,776,513 0.54 479,393
0.50 43,706,000 0.65 284,089
Note: Resources estimated based on a 2.6 grammes per tonne specific gravity
applied for all blocks.
Assuming a 0.3 per cent. copper cut-off, the resultant mineral resource is 191
million tonnes grading 0.43 per cent. copper that hosts 821 thousand tonnes of
copper. A target to extract 500,000 tonnes of copper (61 per cent. of the
821,000 tonnes contained copper) would result in a tonnage of 100 million
tonnes of ore at 0.5 per cent. copper. At a mining rate of 7 million tonnes
per annum, this would give a 14 year mine life. 35,000 tonnes of copper per
annum could be extracted over the 14 year mine life, which at a 65 per cent.
processing recovery, would deliver production of 22,750 tonnes of copper per
annum. A long section showing the extent of mineralisation at Garadag is shown
in Figure 3.
Figure 3: Long section of the Garadag Deposit showing drill hole traces
Ongoing studies by Anglo Asian
As part of the initial validation of the Data by Anglo Asian, five AzerGold
CJSC drill cores with a total length of 1,305 metres were geologically logged
and 815 core samples were assayed. Based on this new geological logging, the
mineralisation at Garadag has been classified into "leached zone", "oxide
zone", "enrichment zone", "transition zone", and "primary zone" (Figure 4
below). This will further assist the geometallurgical approach for process
selection.
Figure 4: Schematic cross-section through part of Garadag Deposit showing
mineral zonation
Assay and analysis data from ALS is being used to determine geochemical
signatures from rock and alteration geochemistry with work carried out by
Anglo Asian and specialists of the Natural History Museum of London. Work
includes identifying the geochemical domains and 'ore' mineralogical domains
within the database, assessing mineral geochemistry, exploring the possibility
of developing algorithms for the classification of the lithological 'ore'
mineral and alteration domains, and identifying intersections where further
mineralogical assessment is required. This work will assist our understanding
of the future potential of the deposit.
Next steps in evaluation of the Data
All data will be transferred to the new database being developed by the
Company and checked and validated to ensure the information is correct. High
resolution photography and check logging or geological relogging of all 23,454
metres of drill core will be carried out to ensure consistency of geological
description and identification of features consistent with porphyry modelling.
All core and sample photographs will be compiled into a digital data set as a
sub-group of the main database.
A full mining assessment will be made to determine the likely best options for
extraction, which will involve the following stages:
(i) Previous models of extractable mineralisation have been based on
open pit methods. However, an underground mining method trade-off study will
be carried out to assess the economics of underground mining. This will enable
preparation of the optimum mining plan for a combined open pit and underground
mine. This will then be compared to the alternative approach of utilising
in-situ recovery methods.
(ii) Various geological techniques will be employed to understand the
geometallurgical properties of the deposit for mine development. In parallel,
planning for an environmental assessment and administration of the site are
underway.
(iii) In-house petrological-mineralogical studies will be utilised
for metallurgical work planning.
(iv) Reverse circulation drilling will be used for exploration and
near surface sampling, while core drilling will be deployed for exploration,
resource infill drilling, check or twin drilling, metallurgical, geotechnical,
and hydro-geological data acquisition. The Company is also investigating the
option of core scanning and hyper-spectral scanning.
The Garadag contract area also hosts four other known mineralisation targets
named as "Moruglu", "Gochdere", and "Seyidler" (Figure1) plus "Ashaqi Cayir"
and "Yuxari Cayir" collectively known as "Jaghirchay" near Garadag (Figure 5).
The length of the target zone adjacent to and including Garadag for
exploration is 9.8 kilometres (Figure 5).
Figure 5: Copper mineralisation potential over a length of 9.8 kilometres
Processing of ores from the Garadag Deposit
Production rates from Garadag, combined with Xarxar, could exceed 30,000 to
35,000 tonnes of copper per annum from a dedicated processing facility
constructed for the Xarxar and Garadag mines. It will be separate from the
current processing facilities at Gedabek.
Copper ores are typically processed by flotation, which generally gives a
higher recovery than heap leaching. However, flotation produces a concentrate,
which requires smelting and refining to produce saleable copper metal, and a
proportion of its copper content is retained by its purchaser ('Offtaker').
Flotation also requires the construction of a tailings dam. The Company is
therefore studying other methods of processing to maximise copper production
and revenue:
· Heap leaching of the oxides and transition ores, followed by
solvent extraction and electro-winning to produce cathode copper metal. No
tailings dam is required for this process.
· Bacterial leaching of the sulphide copper ores
Each of the various methods has a different profile of costs and revenues and
the Company is currently evaluating them to determine which is optimal.
In-situ recovery is another approach which is also being considered.
Appendix One
Technical reports received as part of the AzerGold CJSC data package (the
Data)
Reports Topic Report name
Reports Ecology "Environmental impact assessment project of exploration works in Garadag ore
deposit"
Geology "Technical Report on the result of the geological exploration works carried
out in the Garadag contract area"
Geophysics "Interpretation of IP/Resistivity Survey, Khar Khar Area, Azerbaijan" (outside
of deposit)
Ecology "Environment baseline assessment Garadag, Kharkhar and Jayirchay copper
deposits"
Geology Report on the results of the geological and geophysics work conducted
according to Annex No. 2 of the contract "On the execution of geophysical
surveys in the Kharkhar region" (outside of deposit)
Metallurgy "Technological characteristics of the Garadag ore deposit" (short)
Lithochemistry "Preliminary interpretation of lithogeochemistry in the Djagirchay area,
Garadakh ore district"(short)
Glossary
"A, B, C1 and C2" Categories of ore body defined under the Russian Standard as having met
minimum requirements of exploration information and knowledge;
"Assay" Measure of valuable mineral content;
"Bacterial leaching" A process that extracts valuable metals from a low-grade ore with the help of
microorganisms;
"Core" A solid, cylindrical sample of rock typically produced by a rotating drill
bit, but sometimes cut by percussive methods;
"Cu" Copper;
"Cut-off grade" Grade of a commodity, measured as an amount per unit mass, used to delineate
the outer limits of a proposed ore body;
"Drillhole" Technically, a circular hole drilled by forces applied percussively and/or by
rotation; loosely and commonly, the name applies to a circular hole drilled in
any manner;
"Drilling" The operation of making deep holes with a drill for prospecting, exploration,
or valuation;
"Enrichment zone" A mineral deposition process in which near-surface oxidation produces acidic
solutions that leach metals, carry them downward, and reprecipitate them;
"Flotation" A method used to separate and concentrate ores by altering their surfaces to a
hydrophobic or hydrophilic condition;
"g" Grammes;
"g/t" Grammes per tonne;
"Geological logging" A written and/or graphic record of the geologic data obtained from drillhole
core and/or cuttings;
"Geostatistical methods" The interpretation of mineralisation and geology that controls mineralisation;
"Grade" The relative quantity or the percentage of ore-mineral or metal content in an
orebody;
"Hydro-geological" A (https://www.lawinsider.com/dictionary/hydro-geological-study) study of
the occurrence, distribution, quality movement of the shallow most groundwater
of the state and the potential impact of wastewaters on the groundwater;
"Indicated Resource" That part of a Mineral Resource for which quantity, grade (or quality),
densities, shape and physical characteristics are estimated with sufficient
confidence to allow the application of Modifying Factors in sufficient detail
to support mine planning and evaluation of the economic viability of the
deposit. Geological evidence is derived from adequately detailed and reliable
exploration, sampling and testing gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes, and is
sufficient to assume geological and grade (or quality) continuity between
points of observation where data and samples are gathered. An Indicated
Mineral Resource has a lower level of confidence than that applying to a
Measured Mineral Resource and may only be converted to a Probable Ore Reserve;
"Induced polarisation" A ground-based geophysical survey technique measuring the intensity of an
induced electric current, used to identify disseminated sulphide deposits;
"Inferred Resource" That part of a Mineral Resource for which quantity and grade (or quality) are
estimated on the basis of limited geological evidence and sampling. Geological
evidence is sufficient to imply but not verify geological and grade (or
quality) continuity. It is based on exploration, sampling and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes;
"JORC" The Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves, as published by the Joint Ore Reserves Committee of The
Australasian Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia;
"JORC (2012)" The 2012 edition of the JORC code;
"Leaching" The separation, selective removal or dissolving-out of soluble constituents
from a rock or ore body by the natural actions of percolating solutions;
"m" Metre;
"Mineral Resource" A concentration or occurrence of material of economic interest in or on the
earth's crust in such form and quantity that there are reasonable and
realistic prospects for eventual economic extraction. The location, quantity,
grade, continuity, and other geological characteristics of a Mineral Resource
are known, estimated from specific geological evidence and knowledge, or
interpreted from a well-constrained and portrayed geological model;
"Mineralisation" The process by which minerals are introduced into a rock. More generally, a
term applied to accumulations of economic or related minerals in quantities
ranging from weakly anomalous to economically recoverable;
"MRE" Mineral Resource Estimate;
"Mt" Million tonnes;
"Open pit mining" Mining of a deposit from a pit open to surface and usually carried out by
stripping overburden materials;
"Ore" The naturally occurring material from which a mineral or minerals of economic
value can be extracted profitably or to satisfy social or political
objectives. The term is generally but not always used to refer to
metalliferous material, and is often modified by the names of the valuable
constituent;
"Ore reserves" Is the economically mineable part of a Measured and/or Indicated Mineral
Resource. It includes diluting materials and allowances for losses, which may
occur when the material is mined or extracted and is defined by studies at
Pre-Feasibility or Feasibility level as appropriate that include application
of Modifying Factors. Such studies demonstrate that, at the time of reporting,
extraction could reasonably be justified;
"Oxidation" A chemical reaction caused by exposure to oxygen that results in a change in
the chemical composition of a mineral;
"Oxide zone" The uppermost layer of a mineral deposit that has been exposed to oxygen in
the atmosphere or near-surface waters;
"Petrological-mineralogical studies" The study of rocks and the processes that form and transform them and the
crystal structure and physical properties of the mineral constituents of
rocks;
"Pit optimisation" Analysis conducted to determine the most profitable open pit design;
"Primary zone" The area of minerals deposited during the original period or periods of
mineralisation containing unaltered primary minerals;
"Recovery Rate" A term used in process metallurgy to indicate the proportion of valuable
material obtained in the processing of an ore. It is generally stated as a
percentage of the material recovered compared to the total material present;
"Russian Standard" Referring to the Gosstandart of Russia, the national Russian standard on
mining and minerals as published by the National Certification Body of the
Russian Federation and adhered to by GKZ and Rosnedra;
"Tailings dam" An earth-fill embankment dam used to store byproducts of mining operations
after separating the ore from the gangue;
"Transition zone" The broken, weathered zone between the subsoil and competent, unaltered
bedrock.
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.
All references to "$" are to United States dollars.
For further information please contact:
Anglo Asian Mining plc
Reza Vaziri, Chief Executive Officer Tel: +994 12 596 3350
Bill Morgan, Chief Financial Officer Tel: +994 502 910 400
Stephen Westhead, Vice President Tel: +994 502 916 894
SP Angel Corporate Finance LLP (Nominated Adviser and Broker) Tel: +44 (0) 20 3470 0470
Ewan Leggat
Adam Cowl
Hudson Sandler (Financial PR) Tel: +44 0) 20 7796 4133
Charlie Jack
Harry Griffiths
Competent Person Statement
The information in the announcement that relates to exploration results,
minerals resources and ore reserves is based on information compiled by Dr
Stephen Westhead, who is a full-time employee of Anglo Asian Mining with the
position of Vice-President, who is a Fellow of The Geological Society of
London, a Chartered Geologist, Fellow of the Society of Economic Geologists,
Fellow of the Institute of Materials, Minerals and Mining and a Member of
the Institute of Directors.
Stephen Westhead has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves'. Stephen Westhead consents to the
inclusion in the announcement of the matters based on his information in the
form and context in which it appears.
Stephen Westhead has sufficient experience, relevant to the style of
mineralisation and type of deposit under consideration and to the activity
that he is undertaking, to qualify as a "competent person" as defined by the
AIM rules. Stephen Westhead has reviewed the mineral resources included in
this announcement. For the avoidance of doubt, resources and economically
extractable copper figures in this notification are not based on a Standard
for the reporting of reserves and resources, such as JORC, as defined in the
AIM Rules for Companies.
About Anglo Asian Mining
Anglo Asian Mining plc (AIM:AAZ) is a gold, copper and silver producer
in south-west Asia with a broad portfolio of production and exploration
assets in Azerbaijan. The Company produced 57,618 gold equivalent ounces
("GEOs") for the year ended 31 December 2022.
In December 2021, the Company undertook a private placement which acquired
19.8 per cent. of Libero Copper & Gold Corporation ("Libero"). Libero is
listed on the TSX Venture Exchange in Canada and owns, or has the option
to acquire, several copper exploration properties in North and South America,
including Mocoa in Colombia, one of the world's largest undeveloped
copper-molybdenum resources. Two further follow-on investments have been made
in Libero to maintain the Company's shareholding at 19.8 per cent.
On 5 July 2022, the Parliament of Azerbaijan ratified amendments to the
Company's Production Sharing Agreement, which granted it legal title to three
additional concessions with a combined area of 882 square kilometres,
including the Garadag porphyry copper deposit, with a Soviet classified
resource of over 300,000 tonnes of copper. https://www.angloasianmining.com/
(https://www.angloasianmining.com/)
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