Anglo Asian Mining (LSE:AAZ) revealed its maiden JORC mineral resource and ore reserve estimate for its producing Gadir underground mine in Azerbaijan on Thursday, sending shares down by 4.6pc to 73p.

The asset, which is based on Anglo Asian’s Gedabek contract area and has been in production since 2015, contains measured plus indicated mineral resources of 1,775,000ts. This is expected to hold 145,200oz of gold, 736,100oz of silver, 3,295ts of copper, and 14,470ts of zinc. Meanwhile, the site also contains inferred mineral resources of 571,000ts containing 27,200oz of gold, 104,400oz of silver, 571ts of copper and 2,972ts of zinc.

Elsewhere, Gadir has been estimated to contain proved and probable ore reserves of 797,000ts at a grade of 2.73g/t gold. This is thought to contain 70,000oz of gold, 11.86g/t silver containing over 300,000oz of silver and 0.17pc copper containing nearly 1,400ts of copper. At current production rates, Anglo Asian expects this to give the mine a life of more than five years.

The company said the publication of these figures is in line with its strategy of formalising its global resource inventory of producing assets. This also includes the Gedabek open pit and the Ugur open pit. Indeed, it has now prepared JORC-compliant resources and reserves estimates for all of its producing assets.

On this, Anglo Asian group director of geology and mining Stephen Westhead said: ‘The completion of this work provides a strong understanding of the combined production profile of all operating mines, that gives a mine life until end 2024 from the current reserves.

Meanwhile, Anglo Asian said it has now completed a 3D geological model of Gadir to support further mining and exploration. Expansion work is ongoing and is expected to enhance the site’s maiden resource and reserves estimate further.

Westhead added: ‘Importantly, the resources adjacent to these mineral reserves provide the opportunity to be further upgraded for future production. Additionally, exceptional exploration potential exists at not only the Gedabek Contract Area, but also at the Ordubad and Gosha Contract Areas, which will be evaluated in due course to increase the Group resources with the aim of expanding current mines and constructing new mines.’

Meanwhile, chief executive Reza Vaziri said: ‘This process of comprehensive geological exploration is continuing, and as additional geological data are obtained, this mineral resource and reserve estimate will be further updated.  Supporting these activities is a detailed, three-dimensional geological model of Gadir which will assist in both mining the deposit and further exploration.’

Anglo Asian has forecast metal production of between 82,000 to 86,000 gold equivalent ounces in 2019. Of this, between 28,000 to 30,000 GEOs is in the form of copper and gold flotation concentrate.

Author: Daniel Flynn

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