REG - Anglo Asian Mining - Xarxar annual copper production target

Anglo Asian MiningAnnouncement

16/03/2023 07:00

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RNS Number : 1312T  Anglo Asian Mining PLC  16 March 2023

16 March 2023

Anglo Asian Mining plc

Targeting 10,000 tonnes of annual copper production at Xarxar following
geological modelling and open pit optimisation study

 

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 it has completed an initial geological block model and open pit
optimisation study at the Xarxar deposit. The Company now expects mining and
processing of 3 million tonnes of ore per annum, with a production target of
10,000 tonnes of copper metal per annum over a 7-year period.

 

Since July 2022, an extensive geological exploration programme has been
carried out at the Xarxar deposit, targeting the central copper mineralisation
zone. Surface drill holes intercepted significant high-grade and continuous
grades of copper mineralisation. The base case open pit optimisation study
used a copper price of $8,000 and showed over 93,000 tonnes of economically
extractable copper. The detailed results of the geological exploration are set
out below in appendix one. The Company has used its own in-house estimate of
resources and economically extractable copper in this notification and these
figures are not based on a Standard, such as JORC. The Company intends to
carry out JORC reporting on completion of the ongoing drilling and exploration
programme.

 

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. An alternative
approach utilising the option of in-situ recovery is also being studied.

 

Exploration is continuing in the central mineralisation zone, and further
resource estimation will be carried out.

 

Anglo Asian Vice-President, Stephen Westhead, commented:

"These results represent an important step in our strategy of transitioning to
a mid-tier miner, as Xarxar is expected to contribute a considerable amount of
annual copper production to our portfolio. The initial study and exploration
have delivered significant upside potential. The Company is enthused by the
positive results and potential for advancing a 100,000 tonne plus copper metal
project towards the production target. The project's development options,
including mining, processing and in-situ recovery, are currently being
assessed. The rock mass properties, the presence of copper and molybdenum
minerals and the geological setting suggest a porphyry formation."

 

Block model of the Xarxar deposit

A preliminary three-dimensional dynamic block model has been completed (Figure
1), which will be updated as further drilling takes place. A drill hole
database has been set up, consisting of Anglo Asian and AzerGold CJSC drill
results. The model shows that copper mineralisation exhibits encouraging
continuity.

Figure 1: Block model of Xarxar showing a cross-section through the
three-dimensional model

Mineralisation modelling was carried out within a 0.1 per cent. copper shell
and grade-tonnage estimates were made using various cut-off grades. The range
of the contained amounts of copper, based on mineralisation above certain
depths, is as follows:

 Above level 1,200 metres                                                          Above level 1,000 metres
 cut-off (Cu %)  Mineralisation (tonnes)  Resultant (Cu %)  Metal (Cu tonnes)      cut-off (Cu %)  Mineralisation (tonnes)  Resultant (Cu %)  Metal (Cu tonnes)
 0.15            41,394,352               0.34              140,741                0.15            64,915,146               0.32              207,728
 0.30            17,095,640               0.53              90,607                 0.30            23,428,520               0.51              119,485
 0.45            8,150,558                0.72              58,684                 0.45            10,212,706               0.71              72,510

 

Pit optimisation modelling

Preliminary optimisation modelling to test the economics for various mining
options is underway to initially assess the open pit potential. The
optimisation modelling shows that open pit mining would be economically viable
at the Xarxar deposit. Studies are also ongoing to assess underground mining
options to yield the optimum mix of open pit and underground mining.

The base case for the open pit optimisation used a copper price of $8,000.
Copper metal prices within the range of $5,000 - $20,000 per tonne were used
to test the sensitivity of the open pit to copper metal prices and mineral
zone geometry. Two pit depths were used as a "minimum" and "maximum" elevation
to establish the amount of mineralisation located beneath the various
intervening pit floors. Significant mineralisation is located below the open
pit floor in the base case. This will allow for the optimisation of the
combined open pit and underground mining approach. The results of these
initial open pit evaluations are shown in Figure 2.

Figure 2: Cross section showing the various pit shell profiles at various
copper prices

The results of the initial open pit optimisation study (Base Case 'OP 3' using
a copper price of $8,000) and sensitivities are shown in the following table:

 

 OPTION                 ORE (tonnes)  WASTE (tonnes)  STRIPPING RATIO  COPPER (tonnes)  COPPER (per cent.)  BOTTOM DEPTH (metres)

 (copper price/tonne)
 OP1 - $5,000           7,362,221     21,685,157      2.9              51,513           0.70                150
 OP2 - $7,500           17,334,016    29,376,561      1.7              85,573           0.49                190
 Base Case OP3 - $8000  20,116,723    31,982,108      1.6              93,408           0.46                205
 OP4 - $10,000          29,176,251    39,932,179      1.4              114,732          0.39                240
 OP5 - $12,000          36,224,004    52,831,917      1.5              130,876          0.36                270
 OP6 - $15,000          43,739,585    76,392,038      1.7              147,663          0.34                310
 OP7 - $20,000          53,028,965    131,403,872     2.5              169,064          0.32                360

 

Further drilling targeting both infill and extension of mineralisation is
ongoing. In addition, a detailed metallurgical study using the microscopic
study of thin and polished sections of rock, along with phase analysis, will
be used to determine the supergene and enrichment versus hypogene mineral
assemblages. In parallel, Anglo Asian is carrying out metallurgical test work
to assess processing options, which include flotation to produce copper
concentrate, or copper heap and bacterial leaching, followed by solvent
extraction and electrowinning (SX-EW) to produce cathode copper metal.

Appendix One

Geological exploration work carried out at Xarxar

 

Exploration activity carried out to the end of February 2023 by Anglo Asian on
the Xarxar deposit include the following:

·    12 surface trench and 36 outcrop samples

·    19 diamond drill core holes with a total length of 6,696 metres

·    9 reverse circulation holes with a total length of 830 metres

·    472 metres of underground development with a section area 3.5 metres
by 3.5 metres

·    327 underground channel samples with total length of 333 metres

·   All drill holes and channel samples have been geologically logged,
sampled, assayed and loaded to the new database

·   All data (Anglo Asian and historical) converted to "new standard"
database system which will be imported to Seequent "MX deposit" software

·    Geotechnical study of the deposit completed by an independent
engineering contractor, including geotechnical core logging, laboratory
analysis and surface structural mapping.

·    Mineralogical-petrological and X-ray diffraction (XRD) alteration
studies and lithological-structural-alteration mapping of the deposit is in
progress.

 

Utilising the geological model geometry, further drilling has been planned to
test extensions of mineralisation and refine the understanding of the
geological structure.

 

The Xarxar deposit hosts a range of copper minerals, including malachite,
azurite, chalcocite, bornite, neotocite, chalcopyrite, rarely molybdenite and
pyrite minerals associated with intense argillic and phyllic alteration. The
maximum and average grades of copper by sample method are shown below:

 

 Type of sampling              Number of assays  Maximum copper percentage  Average copper percentage
 Surface trench                56                2.15                       1.33
 Reverse circulation drilling  830               1.28                       0.49
 Core drilling                 6,661             7.39                       0.49
 Underground channel           327               2.57                       0.57

 

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 Garadagh 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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