RNS Number : 8102S

Anglo Asian Mining PLC

14 March 2019

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

14 March 2019

Anglo Asian Mining plc

Maiden JORC Mineral Resources and Ore Reserves for the producing

Gadir Underground Mine

Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer, is pleased to announce maiden Mineral Resources and Ore Reserves, estimated in accordance with the JORC (2012) code, for the producing Gadir Underground Mine ("Gadir") located at the Company's Gedabek Contract Area ("Gedabek") in Western Azerbaijan. The Mineral Resources and Ore Reserves are the same as those published as a Company estimate on 25 February 2019. The mineral resources estimate is based on a robust geological model, which benefits from information gathered during mining of the deposit since 2015, combined with ongoing geological work and exploration drilling.

Overview

· Maiden JORC Mineral Resources:

o Measured plus Indicated Mineral Resources (at a cut-off grade of 0.5 grammes per tonne of gold) of 1,775,000 tonnes containing 145,200 ounces of gold, 736,100 ounces of silver, 3,295 tonnes of copper and 14,470 tonnes of zinc

o Inferred Mineral Resources (at a cut-off grade of 0.5 grammes per tonne of gold) of 571,000 tonnes containing 27,200 ounces of gold, 104,400 ounces of silver, 571 tonnes of copper and 2,972 tonnes of zinc

· Maiden JORC Ore Reserves estimate:

o Proved and Probable Ore Reserves (at a cut-off grade of 1.2 grammes per tonne of gold) of 797,000 tonnes at a grade of 2.73 grammes per tonne gold containing about 70,000 ounces of gold, 11.86 grammes per tonne silver containing over 300,000 ounces of silver and 0.17 percent copper containing nearly 1,400 tonnes of copper

o At the current production rate, this gives over a mine life of over five-years

o These reserves are the economic part of the Measured plus Indicated Mineral Resources

· A comprehensive three-dimensional geological model of Gadir has now been completed which will support future mining and further exploration

· Geological exploration of additional areas of the deposit, which remains open at depth and along strike, is continuing and has the potential to further enhance this maiden resource and reserves estimate

· Publication of these JORC mineral resources and ore reserves is in line with the Company's strategy to formalise its global resource inventory of producing assets (which also includes Gedabek Open Pit and the Ugur Open Pit). Resources and reserves estimates classified according to the JORC Code have now been prepared for all the Company's producing mines.

Gadir Background

· The polymetallic sulphide deposit was discovered by surface exploration core drilling, and subsequently accessed via an adit tunnel in 2015. On reaching the mineralisation for further evaluation, mining of the deposit commenced.

· Production mining has continued since 2015, on a simultaneous exploration-mining basis. However, as part of the recent strategy to formalise the resources classified in accordance with the JORC (2012) Code, the Gadir Mineral Resources report and Ore Reserves report have been prepared.

· The mineral resource estimate was prepared utilising the extensive geological and mining information that comprised surface core drill holes (64 drill holes with a total length of 22,458 metres), underground core drill holes (338 drill holes with a total length of 15,512 metres), and 8,645 underground channel samples.

· Total underground development as at end 2018 was over 10 kilometres, comprising nearly 7,000 metres of development tunnelling, 902 metres of decline drives, over 1,534 metres of spiral ramp and 844 metres tunnelling towards and under the northern part of the Gedabek open pit.

The Gadir JORC Mineral Resources Report can be accessed via the following link:

http://www.rns-pdf.londonstockexchange.com/rns/8102S_2-2019-3-13.pdf

The Gadir JORC Ore Reserves Report can be accessed via the following link:

http://www.rns-pdf.londonstockexchange.com/rns/8102S_1-2019-3-13.pdf

Anglo Asian CEO, Reza Vaziri, said "I am delighted to announce the maiden JORC Mineral
Resources and Ore Reserves estimate for the Gadir deposit, which, together with our JORC Resources and Reserves estimates for our Gedabek Open Pit and Ugur underground mines, provide investors with a tangible sense of the overall mineralised potential of our main Gedabek Contract Area where we have been producing gold and copper since 2009.

"To prepare JORC resource and ore reserves estimate for a complex underground mine is a technically very difficult exercise and this resource and the reserves estimate demonstrates the high expertise of the Company's geologists. 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 Group Director of Geology & Mining, Stephen Westhead, said "This maiden resource and ore reserve estimate is for Gadir only and does not include any underground mining resource potential beneath the Gedabek open pit, which is located some 500 metres from the Gadir resource. The Gadir Mineral Resources and Ore Reserves estimates assess the total mineral inventory as known from exploration and development work to date, including material immediately adjacent to areas already mined that may be re-accessed pending an intensive geological and geotechnical risk assessment. The Gadir property continues to be an important asset of the Company and, with it remaining open at depth and along strike, may yield significant further upside to Anglo Asian in the future.

"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. 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."

JORC (2012) Mineral Resources Statement

The Mineral Resource estimate was prepared in accordance with JORC Code (2012), which is the current edition of the JORC Code. The resources stated below are in-situ and depleted for mining development and production to the end of August 2018.

Mineral Resources

CLASSIFICATION (Cut-off grade 0.5 g/t Au)	Tonnage	Gold		Silver		Copper		Zinc
CLASSIFICATION (Cut-off grade 0.5 g/t Au)	kt	g/t	koz	g/t	koz	%	t	%	t
Measured	540	3.70	64.2	17.49	303.6	0.29	1,566	1.01	5,454
Indicated	1,235	2.04	81.0	10.89	432.4	0.14	1,729	0.73	9,016
Measured + Indicated	1,775	2.54	145.2	12.90	736.1	0.21	3,295	0.84	14,470
Inferred	571	1.48	27.2	5.68	104.4	0.10	571	0.52	2,972
Total	2,347	2.29	172.4	11.14	840.4	0.19	3,866	0.78	17,442

JORC (2012) Ore Reserves Statement

The ore reserves estimate was also prepared in accordance with JORC Code (2012). The Ore Reserves are derived from the Measured plus Indicated Mineral Resources and are presented below.

Ore Reserves

CLASSIFICATION (Cut-off grade 1.2 g/t Au)	Tonnage	Gold		Silver		Copper
CLASSIFICATION (Cut-off grade 1.2 g/t Au)	kt	g/t	koz	g/t	koz	%	t
Proved	222	2.81	25	14.13	101	0.24	535
Probable	575	2.41	45	10.99	203	0.15	852
Total	797	2.73	70	11.86	304	0.17	1,387

Mineral Resources and Ore Reserves Estimation Overview

Anglo Asian, together with the mining and geological consulting group Datamine International, prepared the resources and the reserve estimation for gold, silver and copper of the Gadir deposit. Zinc was not estimated as part of this reserve as is under study at resource level currently. Further information regarding the Mineral Resources estimation parameters per Table 1 of the JORC Code are set out in Appendix One (Section 3) and information regarding the Ore Reserves estimation parameters per Table 1 of the JORC code are set out in Appendix One (Section 4). A glossary of terminology related to the mineral resource and reserves estimate and other information is set out in Appendix Two.

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 Director of Geology & Mining, who is a Fellow of The Geological Society of London, a Chartered Geologist, Fellow of the Society of Economic Geologists, Member 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 resources and reserves included in this announcement.

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 visit or contact:

Reza Vaziri	Anglo Asian Mining plc	Tel: +994 12 596 3350
Bill Morgan	Anglo Asian Mining plc	Tel: +994 502 910 400
Stephen Westhead	Anglo Asian Mining plc	Tel: +994 502 916 894
Ewan Leggat	SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel: +44 (0) 20 3470 0470
Soltan Tagiev	SP Angel Corporate Finance LLP	Tel + 44 (0) 20 3470 0470
Susie Geliher	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177
Gaby Jenner	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177

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.

Appendix One: JORC Code, 2012 Edition - Table 1 report: Gadir Deposit (Anglo Asian Mining plc)

Mineral Resource statement date: Database as 20 August 2018

The following table provides a summary of assessment and reporting criteria used at the Gadir deposit for the reporting of exploration results, Mineral Resources and Ore Reserves in accordance with the JORC Table 1 checklist in The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition).

Section 1 Sampling Techniques and Data

(Criteria in this section applies to all succeeding sections.)

Criteria

JORC Code explanation

Commentary

Sampling techniques

· Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

· Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

· Aspects of the determination of mineralisation that are Material to the Public Report.

· In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

· The majority of the geological information for Gadir was obtained from diamond core drilling (DD). Both surface (60 drillholes) and underground (342 drillholes) drilling has been completed, for a drilling total of 37,970 m.

· In addition, 8,786 channel samples (CH) have been analysed, with a total length of 8,645 m. Channel sample length is typically 1 m, with a width of 10 cm and a depth of 5 cm. Samples are obtained with use of a grinding machine.

· Chip sampling is undertaken for grade control purposes but is not captured in the drillhole database nor databases planned for resource estimation.

· Full core was split (HQ and NQ only) longitudinally 50% using a rock diamond saw and half-core samples were taken at typically 1 metre intervals or to rock contacts if present in the core run for both mineralisation and wall rock. The drill core was rotated prior to cutting to maximise structure to core axis of the cut core. BQ material is whole-core sampled.

· To ensure representative sampling, diamond drill core was marked considering mineralisation and alteration intensity, after ensuring correct core run marking with regards to recovery.

· Sampling of DD and CH material was systematic and unbiased.

· Diamond drill sample target weight is 2-3.5 kg prior to laboratory processing. Fire Assay (FA) analysis is carried out at the onsite laboratory by Atomic Absorption Spectroscopy (AAS) - 25 g charges are used for Au analysis whilst 10 g charges are used for Ag, Cu and Zn analysis for underground core. Exploration (i.e. surface) DD core used 50 g charges.

· Channel samples typically weigh between 10-20 kg prior to laboratory processing. Charges for Au assaying weigh 25 g whilst 10 g charges are used for Ag, Cu and Zn analysis.

· Handheld XRF (model THERMO Niton XL3t) was used to assist with mineral identification during field mapping and core logging procedures.

Drilling techniques

· Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

· DD accounts for 80% of the material drilling used within the Gadir resource and comprises of HQ, NQ and BQ core. During the exploration and development phases, DD was completed from both surface and underground. Infill DD was then completed from underground locations.

· The majority of the core drilled from the surface was either HQ (63.5 mm) or NQ (47.6 mm) in diameter. Underground drilling was completed using NQ or BQ (36.5 mm diameter) standard tubes.

· Drillcore was not orientated due to technological limitations in-country.

Drill sample recovery

· Method of recording and assessing core and chip sample recoveries and results assessed.

· Measures taken to maximise sample recovery and ensure representative nature of the samples.

· Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

· Core recovery was recorded at site, verified at the core yard and subsequently entered into the database. Recovery for mineralised sections was generally very good (in excess of 95%) and over the length of the hole was typically > 90%. Recovery measurements were poorer in fractured and faulted rocks, weathered zones or dyke contacts - in these zones average recovery was 85%.

· From visual inspection of the data, the consultant deemed the core recovery to be good and not have introduced bias into the subsequent sampling.

· Work to date has not identified a relationship between grade and sample or core recovery. However, in core drilling, losses of fines is believed to result in lower gold grades due to washout in fracture zones. This is likely to result in an underestimation of grade, which will be checked during production.

Logging

· Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

· Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

· The total length and percentage of the relevant intersections logged.

· All historic and current drill core was logged in detail for lithology, alteration, mineralisation, geological structure and oxidation state by AIMC geologists, utilising logging codes and data sheets as supervised by the Competent Person ("CP"). Data was captured on paper and manually entered into the database.

· Logging was considered sufficient to support Mineral Resource estimation, mining studies and metallurgical studies.

· Rock Quality Designation (RQD) data was recorded for all core drilling for geotechnical purposes. Fracture intensity, style, fracture-fill and fragmentation proportion data was also collected for geotechnical analysis.

· An independent geotechnical assessment was completed by the environmental engineering company CQA International Limited to support operations and to provide supplementary information for this resource evaluation.

· DD and CH logging was both quantitative and qualitative in nature.

· All core was photographed in the core boxes to show the core box number, core run markers and a scale. All channel samples/faces were sketched prior to cutting.

· The entire length of each drillhole (DD & CH) was logged in full, so 100% of the relevant intersections were logged.

Sub-sampling techniques and sample preparation

· If core, whether cut or sawn and whether quarter, half or all core taken.

· If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

· For all sample types, the nature, quality and appropriateness of the sample preparation technique.

· Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

· Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

· Whether sample sizes are appropriate to the grain size of the material being sampled.

· HQ and NQ full core was split longitudinally in half by using a diamond-blade core saw. The core saw is a 'CM501' manufactured by Norton Clipper and the blades from the 'GSW' series manufactured by Lissmac.

· Full core of BQ size was sampled and as such, only coarse reject and pulp rejects were retained.

· Samples of one half of the HQ/NQ core were taken, typically at 1 metre intervals, whilst the other half was retained as reference core in the tray prior to storage. If geological features or contacts warranted adjustment of the interval, then the intersection sampled was reduced to confine these features. The drill core was rotated prior to cutting to maximise structure to axis of the cut core - cut lines were drawn on during metre-marking.

· All underground faces are marked-up by the supervising underground geologist, constrained within geological and mineralised boundaries. Subsequent CH sample acquisition was carried out with a rock hammer (either hand-held or Bosch power tool) and grinding machines. Samples are collected in calico bags as per AIMC's face sampling procedure. Typical sample masses range between 10-20 kg.

· The procedure involves cutting a linear channel across the vein or orebody in order to obtain the most representative sample possible for the designated interval. CH samples are collected from the floors of the underground workings. When chip channel sampling is conducted along a rock face, of plastic sheeting is laid out for the material to fall on so as to avoid contamination. Sample intervals are 1-1.5 m, 10 cm in width and 5 cm deep. A face sheet with sketch, sample width, sample number(s) and locality are generated for each sampled face.

· Samples are bagged with pre-numbered sample tickets and submitted with a sample submission form to the onsite laboratory. Underground CH samples have been used in the Mineral Resource estimate. Chip samples have not been used in the Mineral Resource estimate and are primarily used to provide guidance for mine-mill reconciliations

· No sub-sampling of CH material needs to be carried out as the samples are deemed 'laboratory-ready' at the channel face. Samples were sent to the on-site laboratory for preparation and pulverised ready for routine AAS and check FA.

· Both DD and CH samples were prepared according best practice, with initial geological control of the half core or CH samples, followed by crushing and grinding at the laboratory sample preparation facility that is routinely managed for contamination and cleanliness control.

· Sampling practice is considered as appropriate for Mineral Resource Estimation.

· Sample preparation at the laboratory is subject to the following procedure.

o After receiving samples at the laboratory from the geology department, all samples are cross referenced with the sample order list. Any errors/omissions are to be followed-up and rectified.

o All samples are dried in an oven at 105-110°C to drive off moisture and volatiles. Samples then head to crushing.

o Crushing - first stage - to -25mm size

o Crushing - second stage - to -10mm size

o Crushing - third stage - to -3mm size

o After crushing the samples are split and 150-250 g of material is taken for assay preparation (depending upon the drillhole type). The remainder is retained for reference.

o The material to be assayed is first pulverised to -75 µm prior to delivery to the assaying facility.

o The performance of the laboratory is monitored daily and at the end of the month when grade control samples are reconciled with mill production.

o Overall, the sampling practice was deemed by Datamine to be appropriate for Mineral Resource estimation purposes.

· Quality control procedures were used for all sub-sampling preparation. This included geological control over the core cutting, and sampling to ensure representativeness of the geological interval.

· Petrographic studies have identified the average Au particle size as being in the order of 5 µm. Sample sizes are therefore deemed appropriate.

Quality of assay data and laboratory tests

· The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

· For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

· Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

· Laboratory procedures, QA/QC assaying and analysis methods employed are industry standard. They are enforced and supervised by a dedicated laboratory team. AAS and FA techniques were utilised and as such, both partial and total analytical techniques were conducted.

· Handheld XRF (model THERMO Niton XL3t) was used to assist with mineral identified during field mapping and core logging procedures.

· The onsite laboratory has QA/QC protocols in place and uses an external control laboratory. Calibration of the analytical equipment in the laboratory is considered to represent best practice.

· Comparing the grade control results and mill performance is a qualitative index of performance - there was good overall quarterly reconciliation between grade control results and the mill for Gadir material.

· All data related to these drillings are located in the relevant drillhole database. Material drillholes include only those completed by DD or CH methods as these impacted on the interpretation of the overall geometry of the resource. Chip samples were not considered material as these were predominantly used for mine-mill reconciliation purposes. The quality of the QA/QC carried out for Gadir was considered to be appropriate for resource and reserve estimation purposes by Datamine.

· QA/QC procedures included the use of field duplicates of RC samples, blanks, certified standards or certified reference material ("CRMs") from OREAS ("Ore Research & Exploration Pty Ltd Assay Standards", Australia), in addition to the laboratory control that comprised pulp duplicates, coarse duplicates, and replicate samples. This QA/QC system allowed for the monitoring of precision and accuracy of assaying for the Gadir deposit.

· A total of 101 pulp duplicates were assayed at varying grade ranges. Fifteen pulp duplicates were assayed for CH samples and 86 for DD samples.

· Au grade ranges as assigned to the Gadir deposit:

Ore Grade Designation	Au (from)	Au (to)
Ore Grade Designation	g/t	g/t
Very Low (VL)	0.00	0.30
Low	0.30	1.00
Medium (MED)	1.00	2.00
High	2.00	5.00
Very High (V HIGH)	5.00	+

· Summary results from the pulp duplicates are presented in the accompanying Gadir Resource Report

· The following CRMs were used for QA/QC control purposes as part of this resource run:

Ore Grade Designation	CRM Description and target grade(s)
	Name	Au	Ag	Cu	Zn
	Name	g/t	g/t	%	%
Very Low	CRM 22_OREAS 501	0.21	0.44	0.28	0.01
Very Low	CRM 30_OREAS 600	0.19	24.31	0.05	0.06
Low	CRM 32_OREAS 905	0.40	0.52	0.16	0.01
	CRM 23_OREAS 502c	0.48	0.80	0.78	0.01
	CRM 17_OREAS 502b	0.49	2.01	0.76	0.01
	CRM 20_OREAS 620	0.67	38.40	0.18	3.12
	CRM 2_OREAS 503b	0.69	1.46	0.52	0.01
	CRM 31_OREAS 601	0.77	49.41	0.10	0.13
	CRM 16_OREAS 623	0.80	20.40	1.72	1.01
	CRM 12_OREAS 59d	0.80	-	1.47	-
Medium	CRM 15_OREAS 701	1.07	1.11	0.48	0.03
	CRM 27_OREAS 253	1.22	0.25	0.01	-
	CRM 19_OREAS 621	1.23	68.00	0.37	5.17
	CRM 13_OREAS 604	1.43	492.00	2.16	0.25
	CRM 7_OREAS 504b	1.56	2.98	1.10	0.01
	CRM 3_OREAS 16a	1.81	-	-	-
	CRM 11_OREAS 602	1.95	114.88	0.52	0.41
High	CRM 24_OREAS 60d	2.43	4.45	0.01	0.00
	CRM 4_OREAS 60c	2.45	4.81	0.01	0.01
	CRM 28_OREAS 254	2.50	0.40	0.01	-
	CRM 9_OREAS 214	2.92	-	-	-
	CRM 10_OREAS 17c	3.04	-	-	-
	CRM 6_OREAS 61e	4.51	5.37	0.01	0.00
	CRM 25_OREAS 61f	4.53	3.61	0.00	-
Very High	CRM 14_OREAS 603	5.08	292.92	1.01	0.91
	CRM 5_OREAS 62c	9.37	9.86	-	-
	CRM 29_OREAS 257	13.96	2.17	0.01	-

· Comparison of average Au grades between the onsite laboratory and the OREAS CRMs (see Report) showed a general bias towards the onsite laboratory underestimating the grade, notably for 'Very High' material; however, overall the bias fell just outside of 0.1 g/t and so is reasonable.

· The same exercise was also conducted for Ag, Cu and Zn CRM assays and the results can be viewed in the Resource Report.

· Production reconciliations between mined grades and assays correlate well and have been used as an additional resource to validate metal content.

· The quality of the QA/QC was considered adequate for resource estimation purposes.

Verification of sampling and assaying

· The verification of significant intersections by either independent or alternative company personnel.

· The use of twinned holes.

· Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

· Discuss any adjustment to assay data.

· Significant intersections were verified internally by a number of company personnel within the management structure of the Exploration and Underground Mining Departments of AIMC. Intersections were defined by the geologists and subsequently reviewed and verified by the Exploration Manager. Further independent verification was carried out as part of the due diligence for resource estimation by Datamine personnel. Assay intersections were cross-validated with visual drillcore intersections (i.e. photographs).

· No twinning of drillholes was carried out at Gadir however extensive underground development has confirmed the overall grade and geological interpretation based on the drillholes.

· Data entry is supervised by a data manager. Verification and checking procedures are in place. The format of the data is appropriate for direct import into Datamine® software. All data is stored in electronic databases within the geology department and backed up to the secure company electronic server that has restricted access.

· Four main files are created per hole, relating to its 'collar' details, 'survey' data, 'assay' results and logged 'geology'. Laboratory data is loaded electronically by the laboratory department and validated by the geology department. Any outliers or anomalous assays are resubmitted.

· Prior to commencement of mining at Gadir, all samples from the surface exploration campaign that intersected mineralisation was sent for external assay at ALS-OMAC in Ireland. This laboratory is currently the preferred company to carry out external assaying for AIMC.

· Independent validation of the database was carried out as part of the resource model generation process where all data was checked for errors, missing data, misspelling, interval validation and management of zero versus 'no data' entries.

· All databases were considered accurate for the Mineral Resource Estimate.

· No adjustments were made to the assay data. The quality of the QA/QC is considered adequate for resource estimation purposes.

Location of data points

· Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

· Specification of the grid system used.

· Quality and adequacy of topographic control.

· The surface mine area was recently (2017) surveyed by a high-resolution drone survey. Five topographic base stations were installed and accurately surveyed using high precision GPS that was subsequently tied into the local mine grid using ground-based total station surveying (utilising the LEICA TS02) equipment. All drillhole collars were then surveyed using the Leica apparatus.

· In 2018, new survey equipment was purchased to be used for precision surveying of drill holes, trenches and workings. This apparatus comprises two Trimble R10s, Model 60 and accessories.

· Equipment used for underground surveying comprises a Leica TCR407 7" Total Station and a GeoSLAM GS-610090.

· Downhole surveying was carried out on HQ and NQ drillholes utilising a Reflex EZ-TRAC magnetic and gravimetric multi-shot instrument, at a downhole interval of 9 m (after an initial collar shot at 3 m). Downhole surveying was not carried out on BQ holes.

· The grid system used for the site is Universal Transverse Mercator 84 WGS Zone 38T (Azerbaijan)

· The level of topographic and survey control was deemed adequate for the purposes of resource modelling by Datamine.

Data spacing and distribution

· Data spacing for reporting of Exploration Results.

· Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

· Whether sample compositing has been applied.

· On surface and underground, collar spacing averaged 20 m over the main mineralised zone and 50 m on the periphery of the resource. Fan-drilling was also carried out around some underground collar sites to test mineralisation at depth.

· The data spacing and distribution (20 x 20 metre grid) over the mineralised zones was deemed to be sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedures and classifications applied. The depth and spacing was considered appropriate for defining geological and grade continuity as required for a JORC Mineral Resource estimate.

· Extensive underground development has tested and confirmed the existing drillhole data and spacing was sufficient to establish grade and geological continuity. The available drill data spacing represents industry best-practice.

· Compositing to 1 metre intervals was applied. Residual intervals (< 0.5 m) were appended to the previous composite interval.

Orientation of data in relation to geological structure

· Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

· If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

· Detailed surface mapping, subsequent drilling and underground development enabled the deposit characteristics to be understood.

· CH samples were obtained where mineralisation was intersected. Orientation of the channels was dependent upon the orientation of the drive and face being sampled.

· Overall, orientation of drilling and sampling was as perpendicular to mineralisation as was practicable.

· Given the geological understanding and the application of the drilling grid orientation, grid spacing and vertical drilling, no orientation-based sample bias was identified in the data that resulted in unbiased sampling of structures considering the deposit type.

Sample security

· The measures taken to ensure sample security.

· Regarding drill core: each drill site was supervised by an experienced geologist. The drill core was placed into wooden or plastic core boxes (sized specifically for the core diameter) at the drill site. Once a box was filled, a wooden/plastic lid was fixed to the box to ensure there was no spillage. Core box number, drillhole I.D. and from/to metres were written on both the box and the lid. The core was then transported to the core storage area and logging facility, where it was received and logged into a data sheet. Core logging, cutting and sampling took place at the secure core management area. The core samples were bagged with labels both in and on the bag, and data recorded on a sample sheet. The samples were transferred to the laboratory, where they were registered as received, for laboratory sample preparation works and assaying. Hence, a chain of custody procedure was followed from core collection to assaying and storage of reference material.

· All samples received at the core facility were logged in and registered with the completion of an "act". The act was signed by the drilling team supervisor and core facility supervisor (responsible person). All core is photographed, subjected to geotechnical logging, geological logging, samples interval determinations, bulk density, core cutting, and sample preparation (each size of fragments 3-5 cm).

· CH and DD samples were weighed, and a Laboratory Order prepared after cutting was complete (CH samples were prepared underground at the face). This was signed by the core facility supervisor prior to release to the laboratory. On receipt at the laboratory, the responsible person countersigned the order acknowledging full delivery of the samples.

· After assaying all reject duplicate samples were received from laboratory to core facility (again recorded on the act). All reject samples were placed into boxes referencing the sample identities and stored in the core facility.

· In the event of external assaying, AIMC utilised ALS-OMAC in Ireland. Samples selected for external assay were recorded on a data sheet and sealed in appropriate boxes for shipping by air freight. Communication between the geological department of AIMC and ALS occurs to monitor the shipment from despatch, through customs clearance, and upon receipt of samples. Results were sent electronically by ALS and loaded to the Company database for study.

Audits or reviews

· The results of any audits or reviews of sampling techniques and data.

· Reviews on sampling and assaying techniques were conducted for all data internally and externally (by Datamine) as part of the resource and reserve estimation validation procedure. No concerns were raised as to the procedures or the data results. All procedures were considered industry standard and well conducted. Datamine identified no material issues that would prevent Gadir from reporting Measured, Indicated and Inferred Mineral Resources.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria

JORC Code explanation

Commentary

Mineral tenement and land tenure status

· Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

· The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

· The Gedabek open pit project is located within a licence area ("Contract Area") that is governed under a Production Sharing Agreement ("PSA"), as managed by the Azerbaijan Ministry of Ecology and Natural Resources ("MENR").

· The PSA grants the Company a number of 'time periods' to exploit defined Contract Areas, as agreed upon during the initial signing. The period of time allowed for early-stage exploration of the Contract Areas to assess prospectivity can be extended if required.

· A 'development and production period' commences on the date that the Company issues a notice of discovery, which runs for 15 years with two extensions of five years each at the option of the Company. Full management control of mining in the Contract Areas rests with AIMC.

· The Gedabek Contract Area, incorporating the Gadir underground mine, currently operates under this title.

· Under the PSA, AAM is not subject to currency exchange restrictions and all imports and exports are free of tax or other restriction. In addition, MENR is to use its best endeavours to make available all necessary land, its own facilities and equipment and to assist with infrastructure.

· The deposit is not located in any national park.

· At the time of reporting no known impediments to obtaining a licence to operate in the area exist and the Contract Area agreement is in good standing.

Exploration done by other parties

· Acknowledgment and appraisal of exploration by other parties.

· The Gadir deposit was discovered in 2012 by AIMC geologists. As such, previous exploration has not been carried out by other parties specific to this deposit.

· During 2012, exploration carried out by AIMC uncovered an outcrop of rhyolite displaying intense silica and potassic alteration on the northwestern flank of the Gedabek operation (about 400 m from the Gedabek open pit). Samples were assayed and returned grade and so they were followed-up with an exploration drillhole.

· A downhole intersection grading 24m at 2.9 g/t Au was returned for this hole, justifying further exploration and project development.

· The following work was further completed to define Gadir:

o Detailed geological and structural mapping (1:5,000 and 1:1,000 scale; 2012-2015)

o Rock chip sampling (650 samples)

o Trenching (5 trenches totalling 200 m length and 160 samples)

o Soil geochemistry study (1,473 samples; 2014)

o Various HQ & NQ surface drill campaigns (2013 - present day)

o Underground NQ & BQ drill campaigns (2015 - present day)

Geology

· Deposit type, geological setting and style of mineralisation.

· The Gadir Au-Ag-Cu-Zn deposit is located in the Gedabek Ore District of the Lesser Caucasus in NW Azerbaijan, adjacent to the city of Gedabay and 48 km west of the city of Ganja. Gadir is characterised as a low-sulphidation (LS) epithermal system.

· The portal to Gadir was independently located on Google Earth at latitude 40°58'59.21"N and longitude 45°79'03.54"E and tunnelled into the flanks of Yogundag Mountain.

· The Gadir ore deposit is located within the large Gedabek-Garadag volcanic-plutonic system. This system is characterised by a complex internal structure indicative of repeated tectonic movement and multi-cyclic activity. Yogundag Mountain is a porphyry-epithermal zone, with known deposits in the area (e.g. Gadir, Gedabek, Umid and Zefer) believed to represent the upper portion of the mineralising system.

· The Gadir orebody has a complicated geological structure and hosts intrusive rocks of different ages and compositions. Three sets of regional fault zones controlling mineralisation have been identified and are characterised on the basis of strike direction and morphological characteristics:

· NW-SE striking faults (e.g. Gedabek-Bittibulag Deep Fault, Misdag Fault)

· NE-trending faults (e.g. Gedabek-Ertepe Fault, Gerger-Arykhdam Fault, Gadir ore-controlling faults)

· Local transverse faults

· The drilling identified a series of vertically stacked, shallow-dipping mineralised lenses within an area of approximately 50 x 100 metres over about 150 m height.

· Various forms of hydrothermal alteration are found to occur at Gadir. Propylitic alteration (+ chlorite/epidote) is observed in the andesitic tuff formation. Argillic alteration (+ clay minerals) is found in the wall rocks and silicification is common in the volcanic units as well as the central part of the deposit.

· Mineralisation primarily exploited at Gadir is Au-Ag from a polymetallic ore, also containing base metals of Cu and Zn. The main ore minerals are sulphides, including pyrite, chalcopyrite, sphalerite and trace galena.

Drill hole Information

· A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

o hole length.

· If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

· A summary of the type and metres of drilling completed is shown below. Material drill hole information provided in Appendix B in the Resource Report.

Purpose	Drillhole Type	Number of Holes	Total Length (m)
Surface	DD	60	22,458
Underground	DD	342	15,512
Underground	CH	-	8,645
TOTAL DRILLING		402	46,615

· Chip samples are primarily used to provide guidance for mine-mill reconciliation purposes and have not been included as part of this Mineral Resource estimation.

· The database contains information related to geological work up until 20^th August 2018.

Data aggregation methods

· In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

· Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

· The assumptions used for any reporting of metal equivalent values should be clearly stated.

· Drilling results were reported using intersection intervals based on an Au grade > 0.3 g/t and internal waste ≥ 1 m thickness. Grades of both Au and Ag within the intersections were stated and the results presented to 2 decimal places.

· No data aggregation methods have been applied to the drillhole data for reporting of exploration results.

· No metal equivalent values have been reported.

Relationship between mineralisation widths and intercept lengths

· These relationships are particularly important in the reporting of Exploration Results.

· If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

· If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').

· Overall orientation of drilling and sampling is as perpendicular to the orebody as is practicable. The geometry of the Gadir orebody has been deemed to be suitably tested and confirmed with surface and underground drilling, as well as underground development.

· A good correlation exists between the mineralisation widths, intercept lengths and orebody modelling and this has been tested and proven through development intersections

· Given the geological understanding and the application of the drilling grid orientation and grid spacing, along with underground development, no orientation-based sample bias has been identified in the data that resulted in unbiased sampling of structures considering the deposit type.

· All intercepts are reported as down-hole lengths.

· Grade control drilling is balanced with exploratory and target-testing programmes.

Diagrams

· Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported. These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

· Appropriate diagrams and sections have been included in the Mineral Resources report.

· Plans and sections are updated regularly onsite to reflect the latest information (e.g. underground development, geological interpretations). The AIMC Survey Department update working headings on a monthly basis in Surpac®.

Balanced reporting

· Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

· Representative reporting of mineralisation styles and intervals has been previously reported by AAM via regulated news service (RNS) announcements on the London Stock Exchange (AIM), on the Company website or at conferences and roadshows.

· The report has been deemed balanced and reflects the views of both Datamine and the CP.

Other substantive exploration data

· Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

· Additional information including photographs of the Gadir area can be viewed on the Anglo Asian Mining website: www.angloasianmining.com

· An independent geotechnical assessment was completed by CQA to support operations and to provide supplementary information for this resource evaluation. This assessment of Gadir involved carrying out a desk study, completion of fieldwork (e.g. assessing tunnel morphology and existing ground support, estimating water inflows) and then interpretation of the data. The results of this study and a copy of the report can be found in the Gadir Ore Reserves report.

Further work

· The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

· Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

· Further exploration and grade control drilling is planned at the Gadir deposit. The targets for this drilling include:

o Down-dip extension of the mineralisation

o Additional drilling chasing mineralisation along-strike

o Exploration drilling between Gadir and Gedabek

· No diagrams to show future planned works are presented in this report as the information is commercially sensitive.

Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)

Criteria

JORC Code explanation

Commentary

Database integrity

· Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

· Data validation procedures used.

· The Gadir database is stored in Access® software. The data used for the Gadir resource was compiled from two different databases:

o the 'Exploration Database' - surface DD holes

o the 'UG database' - underground CH samples and DD holes

· A dedicated database manager has been assigned to monitor all databases. Tasks include checking the data entered against the laboratory report and survey data.

· Geological data is entered by a geologist to ensure there is no confusion over terminology whilst laboratory assay data is entered by the data entry staff.

· A variety of manual and data checks are in place to check against human error of data entry.

· All original geological logs, survey data and laboratory results sheets are retained in a secure location in hard and soft copy format.

· It was noted by Datamine that the supplied Gadir database was not subjected to a full independent database audit prior to estimation as it was understood that the data were audited during upload.

· All data were imported to Datamine Studio RM® software and further validation processes completed. At this stage, any errors found were corrected.

· The validation procedures used include:

o Drillhole depths for the geology, survey and assay logs do not exceed the recorded drilled depth

o Dates are in the correct format and are correct

o Set limits (e.g. for northing, easting, assay values) are not exceeded

o Valid geology codes (e.g. lithology, alteration etc.) have been used

o Sampling intervals are checked for gaps and overlaps

· After the data has been loaded into the database, the following checks are carried out:

o Visual checks that collar locations are correct and compared with existing information (e.g. development wireframes)

o Visual checks of drillhole traces for unusual traces and comparing the actual drillhole strings against the planned strings

· Hence there are several levels of control. This final point was also checked by Datamine prior to modelling.

Site visits

· Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

· If no site visits have been undertaken indicate why this is the case.

· Datamine consultants developed and audited the Gadir Mineral Resource Block Model for the Gadir underground mine. Two Datamine engineers worked on the resources and reserves (one assigned to each project) and were able to verify work practice and procedures.

· Yerzhan Uzakbayev (Senior Resource Geologist; Datamine) visited Gadir for 9 days in August 2018 and worked on the Mineral Resources estimation.

· Aidar Kairbekov (Senior Mining Consultant; Datamine) visited Gadir for 5 days in October 2018 and worked on the Ore Reserves calculation.

· The CP is an employee of the company and as such has been actively in a position to be fully aware of all stages of the exploration and project development. The CP has worked very closely with the independent resource and reserve estimation staff of Datamine, both on site and remotely, to ensure knowledge transfer of the geological situation, to allow geological "credibility" to the modelling process.

Geological interpretation

· Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

· Nature of the data used and of any assumptions made.

· The effect, if any, of alternative interpretations on Mineral Resource estimation.

· The use of geology in guiding and controlling Mineral Resource estimation.

· The factors affecting continuity both of grade and geology.

· There is confidence in the overall interpretation of the Gadir mineral deposit. There is some geology and grade distribution uncertainty on the local scale however this is mitigated by close-spaced fan drilling at 15 m collar spacing as well as underground development information.

· The geological interpretation is considered robust. Geological data collection has included surface mapping, outcrop sampling, core drilling (surface and underground) and geotechnical assessment. This has amassed a significant amount of information for the deposit. Various software has been used to model the deposit, including Leapfrog®, Surpac® and Datamine® packages.

· The geological team have worked in the licence area for many years and the understanding and confidence of the geological interpretation is considered high. Vitaly Khorst (Senior Underground Geologist; AIMC) was involved with geological interpretation and modelling of Gadir with Yerzhan Uzakbayev (Senior Resource Geologist; Datamine).

· No alternative geological interpretation of the mineral deposit exists at this time and so the Mineral Resources estimate is unaffected.

· The geology has guided the resource estimation, especially the structural control where, for example, faulting has defined "hard" boundaries to mineralisation. This deposit-scale structural orientation was used to control the drilling grid and resource estimation search ellipse orientations.

· Grade and geological continuity have been established by the extensive 3D data collection. Gadir has dimensions of about 500 metres by 400 metres and the continuity is well understood, especially in relation to structural effects.

· A geological interpretation of the Gadir orebody was completed utilising geological sections typically at spacing of about 5-10 metres. These interpretations were used to form a wireframe solid in Datamine Studio RM® that was subsequently used as the main domain/mineralised zone for resource estimation.

Dimensions

· The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

· The footprint of the whole mineralisation zone is about 500 metres by 400 metres, with about 200 m overall thickness.

· The average surface elevation around Gadir is 1717.39 m RL. The maximum local RL is 1799.24 m and the minimum local RL is 1654.24 m.

· The elevation of the centre of the block model (within mineralisation) is 1436.89 m RL. The upper elevation of the block model (within mineralisation) is 1537.25 m RL and the lowest elevation is 1316.50 m RL. All measurements taken from the centre of the block.

· The elevation of the centre of the block model (including waste) is 1446.72 m RL. The upper elevation of the block model (including waste) is 1796.50 m RL and the lowest elevation is 1202.75 m RL. All measurements taken from the centre of the block.

· The initial search orientations applied to the model related to the geometry of the orebody. A bearing of -35° and dip of -30° was applied.

Estimation and modelling techniques

· The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

· The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

· The assumptions made regarding recovery of by-products.

· Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).

· In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

· Any assumptions behind modelling of selective mining units.

· Any assumptions about correlation between variables.

· Description of how the geological interpretation was used to control the resource estimates.

· Discussion of basis for using or not using grade cutting or capping.

· The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

· Estimation was completed using Datamine Studio RM® on a parent cell basis. The Gadir Resource Model is a sub-celled block model controlled by the geological domains. In addition, both hard boundaries and top-capping was used for all variables.

· Top-capping was applied to Au, Ag, Cu and Zn assays to minimise the impact of grade outliers/extreme values, reduce the coefficient of variation ("CV") within the mineralisation boundary and minimise the impact on the ordinary kriging ("OK") estimation.

o Au top-cap: 115.00 g/t

o Ag top-cap: 480.00 g/t

o Cu top-cap: 8.50%

o Zn top-cap: 22.00%

· Estimation was conducted via OK using three 'passes'. Inverse Power Distance ("IPD") estimation was performed as well in order to validate and compare the two estimations.

o Full block estimation was performed, negative kriging weights were set to zero and estimation kriging variances greater than the respective variogram variance were reset to the variogram sill.

o Initial search orientations were derived from the principal structural orientations of the mineralisation. The principal search ranges for Au were set at 7 x 8 x 7 m. Second and third passes with x2.5 and x3.5 multipliers for the search ranges were applied. Minimum and maximum samples per estimate were:

o Pass 1 - 16 minimum; 32 maximum

o Pass 2 - 10 minimum; 32 maximum

o Pass 3 - 3 minimum; 20 maximum

· The search was orientated along the plane of mineralisation. This correlated with the average orientation of the Au, Ag, Cu and Zn variography.

· The Mineral Resources Estimate was subsequently depleted for mining to the end of August 2018.

· No assumptions regarding the recovery of by-products were applied.

· No assumptions relating to deleterious elements or other non-grade variables of economic significance were applied.

· The parent cell size of the block model is 5 mX x 5 mY x 5 mZ. This cell size was derived from the extensive underground ore development, infill and grade control drilling, kriging efficiency and slope of regression analysis. A parent cell height of 5 m was deemed optimal for underground planning purposes.

· Waste blocking was also set to 5 x 5 x 5 m sizing.

· No selective mining unit assumptions were made.

· Available testwork indicated possible correlation between grade variables and bulk density data. The grade variables were modelled independently based on the Au domaining (the main revenue for the operation).

· Local knowledge of the mining area and the typical structures from exposures provided the bases for interpretation. This was used to create 3D solids. These solids were used to define hard boundaries during estimation, as observed and verified during mining operations.

· As part of the mining process, grade control drilling, truck sampling and process reconciliation forms part of the daily management of the operations. As such, extensive production data is available for comparison. The relative accuracy of the estimated resource compares well to the production data and the confidence in the estimate, given the amount of geological data, is considered high.

· The OK and IPD estimations were validated by:

o Visual comparison of sections and plans with block estimates and composite intervals.

o Statistical comparison of grade distributions for block estimates and declustered composites.

o Swath plots were created of block model estimates and declustered composites in x,y,z orientations for Au, Ag, Cu and Zn mineralisation.

· These validations confirmed that there was a good correlation between declustered composites and declustered block model estimates. Instances of over-estimation was not encountered during analysis.

· The estimation method is considered appropriate for the style of mineralisation and geometry of the mineralised zone.

Moisture

· Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

· Tonnage was estimated on a dry basis.

Cut-off parameters

· The basis of the adopted cut-off grade(s) or quality parameters applied.

· Grade continuity was assessed at a range of cut-offs between 0.1 g/t and 3.0 g/t Au in 0.1 g/t increments. A tonnage-grade table and graph were prepared based on these variable cut-off grades. Following interrogation of this data, a 0.5 g/t Au cut-off grade was applied for the Gadir deposit.

Mining factors or assumptions

· Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

· This resource estimation was carried out on mineralisation that is currently being mined via underground methods.

· The ore body is being worked using overhand stoping in the upper levels where the dip is steeper and room and pillar workings in the lower levels, where the dip is shallower.

· The workings are connected to the spiral decline by drifts. Ore intersections along these drives are sampled for grade evaluation. The vertical distance between drifts for both mining methods is 10 m.

· Mining dilution and mining dimensions are referenced in Section 4 (Estimation and Reporting of Ore reserves).

· The current mining and ore extraction methodologies are appropriate for the geological conditions. The efficiency of extraction may be increased by sub-level stopping where the ore body is sufficiently thick and continuous.

· Other mining factors are not applied at this stage.

· Mineral Resources are developed by ore drives which are sampled and thereafter the appropriate mining method confirmed.

Metallurgical factors or assumptions

· The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

· The Company currently operates an agitation leach plant, flotation plant, crushed heap leach pad and a run-of-mine dump leach facility.

· Ore is blended with material from other AIMC operations to meet mill production targets. These targets therefore dictate the processing route the material follows.

· The various plant operations have been in use since the start of extraction at Gedabek open pit (2009). As such, the basis for assumptions and predictions of processing routes and type of "ores" suitable for each process available are well understood.

· Due to the high-grade nature of the ore, Gadir ore is typically processed via AGL.

· No metallurgical factor assumptions were used during this estimation however these are discussed in Section 4 (Estimation and Reporting of Ore reserves).

Environmental factors or assumptions

· Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

· The Gadir underground deposit is located in the Gedabek Contract Area where AIMC currently operates two other mines (both open pit).

· Approximately 20% of mine rock waste remains underground to be used primarily as stope-backfill material. The remainder is trucked to the surface waste dump.

· As part of the initial start-up, environmental studies and impacts were assessed and reported for Gedabek. This included the nature of process waste as managed in the tailings management facility ("TMF"). Other waste products are fully managed under the AIMC HSEC team, including disposal of mine equipment waste such as lubricants and oils).

· CQA has carried out a study of production waste management, in addition to designing and supervising the construction of the TMF and its recent expansion. CQA have permanent representation at Gadir and conduct monitoring of their baseline environmental systems (e.g. in local waterways).

· No environmental assumptions were used during this estimation however they are discussed in Section 4 (Estimation and Reporting of Ore Reserves).

Bulk density

· Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

· The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

· Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

· Bulk density values were analysed and determined. A total of 1,818 samples were tested by AIMC from selected core samples, which comprised both mineralisation and waste rocks. The density was tested by rock type, extent of alteration and depth. The method used was hydrostatic weighing.

· Of the 1,818 samples, 292 density measurement samples were used to calculate the average density of the ore.

· The samples within the ore material had an average density of 2.8 t/m3 and the waste rock were assigned a density of 2.5 t/m3. These densities have been used for resource calculation.

· It should be noted that DD samples were tested for density, not CH samples.

· Density data are considered appropriate for Mineral Resource and Mineral Reserve estimation.

Classification

· The basis for the classification of the Mineral Resources into varying confidence categories.

· Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

· Whether the result appropriately reflects the Competent Person's view of the deposit.

· The Mineral Resource has been classified on the basis of confidence in the following criteria:

o AIMC have been involved with the development of the project, from exploration, construction, production and through to processing, since its discovery in 2012

o The nature and associated confidence in the interpretation of the mineralisation

o Proximity to existing underground workings

o DD and CH spacing and density

o DD and CH sampling density and average distance between samples informing the estimate

o The degree of interpolation versus extrapolation, as identified by the estimation pass

o The kriging efficiency and slope of regression of the final estimate

o The overall extents of the Gadir orebody - for example, areas supported by less than two drillholes (e.g. at the periphery) were reclassified as 'Exploration Potential'

· Depending on the estimation parameters (described above), the Gadir resources were classified as Measured, Indicated or Inferred Mineral Resources, as defined by the parameters below. Additional 'Exploration Potential', that fall outside Inferred parameters, have also been considered.

o Measured: Blocks estimated in search volume 1 with a minimum 16 samples (maximum of 32) and maximum of 5 per drillhole within 25 m of workings.

o Indicated: Blocks estimated in search volume 2 with a minimum 10 samples (maximum of 32) and maximum of 5 per drillhole within 25 m of workings.

o Inferred: Blocks estimated in search volume 2 with a minimum 10 samples (maximum of 32) and maximum of 5 per drillhole outside of 25 m of workings or blocks estimated in search volume 3 with a minimum 5 samples (maximum of 20) and maximum of 5 per drillhole outside of 25 m of workings.

o Exploration Potential: Blocks estimated in search volume 3 with a minimum 3 samples (maximum of 20) and all the blocks estimated less than 5 samples, or all other material not classified within the Resource Categories and parameters above.

· It is anticipated that material classified as 'Inferred' or 'Exploration Potential' may be upgraded with further drilling and sampling.

· The results reflect the CP's view of the deposit.

Audits or reviews

· The results of any audits or reviews of Mineral Resource estimates.

· Datamine consultants have been involved with other mining projects owned by the Company within the same contract area as the Gadir underground mine and as such are familiar with the processing methods available, value chain of the mining and cost structure.

· The data used as part of this project were audited, validated and considered adequate for Mineral Resource estimates - all aspects of the data collection and management were observed and evaluated.

· Internal company and external reviews of the Mineral Resources yield estimates that are consistent with the Mineral Resource results.

Discussion of relative accuracy/ confidence

· Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

· The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

· These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

· The relative accuracy of the Gadir Mineral Resource estimate is reflected in the applied Mineral Resource classification as per the JORC Code, 2012 Edition.

· Confidence is high due to successful development and production of the deposit since 2015. There is good reconciliation between mine and mill production grades.

· The August 2018 Gadir Mineral Resources classified as Measured and Indicated are considered local estimates of tonnage and grade. Areas classified as Inferred are considered to be a global estimate of tonnage and grade.

· Regions classified as Exploration Potential contain material that is not considered sufficiently well-defined, at this point in time, to allow mining operations to develop to these areas to extract the material without considerable risk. However, they are considered to be areas for future investigation - further drilling to increase geological confidence and sample/assay density will be able to confirm potential mineralisation.

· The Gadir Mineral Resources table (for Au only) is presented below, with an Au cut-off of 0.5 g/t and depleted for mining development and production up until August 2018:

MINERAL RESOURCES (Cut-off grade 0.5 g/t Au)	Tonnage	Gold
MINERAL RESOURCES (Cut-off grade 0.5 g/t Au)	kt	g/t	koz
Measured	540	3.70	64.2
Indicated	1,235	2.04	81.0
Measured + Indicated	1,775	2.54	145.2
Inferred	571	1.48	27.2
Total	2,347	2.29	172.4
Exploration	5	1.37	0.2

Note that due to rounding, numbers presented may not add up precisely to totals.

· Resources for Ag, Cu and Zn are presented in the main body of the report.

· Production data is available for block model comparison. The relative accuracy of the estimation compares well to the production data, and the confidence in the estimate given the amount of geological data is considered high. Future extraction of mineralisation, grade control and mining data will continue to be used to compare with the Resource model.

· The Mineral Resource Estimate (August 2018) is considered appropriate by the CP.

· It is the CP's opinion that the classification has taken into account all relevant factors, local knowledge of the orebody and wealth of information accumulated since the commencement of exploration of Gadir.

Section 4 Estimation and Reporting of Ore Reserves

(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)

Criteria

JORC Code explanation

Commentary

Mineral Resource estimate for conversion to Ore Reserves

· Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve.

· Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.

· Refer to Section 3 (Estimation and Reporting of Mineral Resources) for more detailed information regarding the Gadir Mineral Resource estimate.

· The Ore Reserves calculation for Gadir was derived from the Gadir Mineral Resource estimate, dated 13^th October 2018. The Model had a cut-off grade of 0.5 g/t Au applied and was depleted for mining development and production up until August 2018.

· The Resource Model assigns material to either Measured, Indicated or Inferred categories dependent upon variables discussed in Section 3 (Estimation and Reporting of Mineral Resources). The 'Exploration Potential' category includes mineralised material that falls outside of Inferred parameters.

· Four tables have been prepared for each estimated commodity showing tonnes & grade, the contained metal by class and the percentage of metal by class. The resources from each model are presented below:

MINERAL RESOURCES (Cut-off grade 0.5 g/t Au)	Tonnage	Gold
MINERAL RESOURCES (Cut-off grade 0.5 g/t Au)	kt	g/t	koz	% koz
Measured	540	3.70	64.2	37%
Indicated	1,235	2.04	81.0	47%
Measured + Indicated	1,775	2.54	145.2	84%
Inferred	571	1.48	27.2	16%
Total	2,347	2.29	172.4	100%
Exploration	5	1.37	0.2	-

MINERAL RESOURCES	Tonnage	Silver
MINERAL RESOURCES	kt	g/t	koz	% koz
Measured	540	17.49	303.6	36%
Indicated	1,235	10.89	432.4	51%
Measured + Indicated	1,775	12.90	736.1	88%
Inferred	571	5.68	104.4	12%
Total	2,347	11.14	840.4	100%
Exploration	5	5.94	0.9	cc

MINERAL RESOURCES	Tonnage	Copper
MINERAL RESOURCES	kt	%	t	% t
Measured	540	0.29	1,566	41%
Indicated	1,235	0.14	1,729	45%
Measured + Indicated	1,775	0.21	3,295	85%
Inferred	571	0.10	571	15%
Total	2,347	0.19	3,866	100%
Exploration	5	0.09	2,470	-

MINERAL RESOURCES	Tonnage	Zinc
MINERAL RESOURCES	kt	%	t	% t
Measured	540	1.01	5,454	31%
Indicated	1,235	0.73	9,016	52%
Measured + Indicated	1,775	0.84	14,470	83%
Inferred	571	0.52	2,972	17%
Total	2,347	0.78	17,442	100%
Exploration	5	0.60	7,620	-

Note that due to rounding, numbers presented may not add up precisely to totals.

· Only Resources defined to Measured and Indicated were considered for Ore Reserve calculation to Proved and Probable for Gadir.

· The Ore Reserve statement is inclusive (not additional to) of the Resource statement.

Site visits

· Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

· If no site visits have been undertaken indicate why this is the case.

· Datamine consultants developed and audited the Ore Reserves estimation for the Gadir underground mine. Two Datamine engineers worked on the resources and reserves (one assigned to each project) and were able to verify work practice and procedures.

· Aidar Kairbekov (Senior Mining Consultant; Datamine) visited Gadir for 5 days in October 2018 and worked on the Ore Reserves calculation.

Study status

· The type and level of study undertaken to enable Mineral Resources to be converted to Ore Reserves.

· The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.

· Study undertaken to enable Mineral Resources to be converted to Ore Reserves was completed to Feasibility standard. As the mine has been operating for nearly four years, operating costs are well understood, with continuous data generated since commencement of mining, and with the geological data being generated from a tightly-spaced drilling grid. Extraction is reasonably justified and calculated to be economically mineable as of the modifying conditions reported.

· The ore will continue to be mined utilising the current mining fleet and will be processed in the current processing facilities of the Company which operates two other mines in the same Contract Area.

· The modifying factors used in conversion of Mineral Resources to Ore Reserves were based on reconciliation and observation of past mining and processing performance.

· A technically achievable mine plan that is economically viable has been designed taking into consideration the JORC resources and modifying factors.

· Confidence in the calculations and results is considered high.

· Extraction of ore from the Gadir mine will continue.

Cut-off parameters

· The basis of the cut-off grade(s) or quality parameters applied.

· Financial factors included in the COG estimates are mining, process and overhead costs, along with mining dilution, payable gold and silver prices and processing recovery.

· In 2018, AAM completed an exercise for estimation of various COGs based on agreed economic parameters with the Technical Services team. A "strategic" COG of 1.2 g/t Au was applied to the Resource Model during calculation of the Ore Reserves as established by AAM (break-even cut-off, "BECOG", plus a return on capital and margin).

· BECOG was calculated at 0.93 g/t Au.

· The COG was verified using a forecasted Au price, costs and metallurgical recoveries from the past financial year. A 1.2 g/t Au COG was applied to create initial stope shapes.

Mining factors or assumptions

· The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design).

· The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc.

· The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre-production drilling.

· The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate).

· The mining dilution factors used.

· The mining recovery factors used.

· Any minimum mining widths used.

· The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion.

· The infrastructure requirements of the selected mining methods.

· The 2018 Gadir Mineral Resources Block Model was used as the basis for stope and development design. No modifications were made to this model for mine design purposes.

· The modifying factors and assumptions used in the conversion of Mineral Resources to Ore Reserves were based on reconciliation and observation of past mining and processing performance, as Gadir has been in production since 2015.

· Ore Reserves were calculated by generating mineable shapes for all areas that contained Measured or Indicated Resources. Ore drive development for access was also considered.

· The underground stope optimisation was run using the industry standard Datamine MSO® software package. Every stope shape output from MSO® was manually inspected to determine its potential for eventual extraction. Exclusion control has been used to avoid the creation of stope shapes within adverse rock-mass or processing material zones.

· For this study, physical exclusion constraints included:

o Depleted resources within stopes and development areas

o "Non-recoverable" material located in areas that cannot be safely mined due to previous mining activities

· The final mineable material comprised the Ore Reserves.

· Access to the orebody is via a single entrance portal that is connected to the workings by a decline development.

· The mining methods currently employed at Gadir are overhand stoping in the 'Upper Zone' (above 1442 mRL). Here, the orebody dip is steeper. Below the 1442 mRL, room-and-pillar extraction is used as the orebody has a shallower dip.

· Access drives were used for both development and stoping. Pillars of the ore are left in place to provide support. No backfill procedure is in place; however, about 20% of the waste rock produced remains underground and is used to backfill stopes on a case-by-case basis.

· Geotechnical parameters were determined based on an independent geotechnical investigation carried out by CQA International Limited, taking into account geological structure, rock type and design orientation constraints.

· It was established that the current mining and ore extraction methodologies are appropriate for the geological conditions. The geotechnical constraints are well understood and assessed ahead of development (especially with respect to fault zone intersection).

· Lateral development design parameters implemented during mine planning for this study are summarised below:

Description	Value
Ramp	4.0 x 4.0 m
Decline	4.0 x 4.0 m
Crosscut	4.0 x 4.0 m
Level Ore Drive	4.0 x 4.0 m
Return Air Raise	Square 1.5 x 1.5 m

· Stope design parameters implemented during mine planning for this study are summarised below:

Overhand stoping
Parameter	Minimum	Maximum
Stope Width	3.5 m	10.0 m
Stope Length	5.0 m	-
Stope Height	5.0 m	-
Pillar Width	4.0 m	-
Dip Angle	30°	90°
Room-and-pillar
Parameter	Minimum	Maximum
Stope Width	3.5 m	10.0 m
Stope Length	5.0 m	-
Stope Height	5.0 m	-
Pillar Width	4.0 m	15.0 m
Dip Angle	40°	90°

· The geotechnical modifying factors have been verified by current underground mining practices.

· Planned stope dilution was considered and designed into the mining shapes and further interrogated against the block model.

· Unplanned stope dilution (e.g. due to overbreak) was assumed to be 10% based on historic production data. This was applied after block model interrogation to generate a diluted ore tonnage and grade.

· The mining recovery factor was estimated to be 95% for both the room-and-pillar and overhand stoping methods and was based on current reconciliation data.

· A minimum mining width of 3.5 m was used based on the nature of the deposit and equipment fleet in operation.

· The Ore Reserves contain approximately 0.08% of Inferred Resources. This material was captured in mining shapes therefore has modifying factors applied. Its inclusion and subsequent impact on economic viability is negligible.

· Gadir is an established, operating mine and all infrastructure required to service the demands is already in place.

Metallurgical factors or assumptions

· The metallurgical process proposed and the appropriateness of that process to the style of mineralisation.

· Whether the metallurgical process is well-tested technology or novel in nature.

· The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied.

· Any assumptions or allowances made for deleterious elements.

· The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole.

· For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?

· The ore extracted from Gadir is treated at the Gedabek processing facilities. The plants process all ore sourced from the Gedabek Contract Area.

· The ore from the Gadir underground mine can be processed by four different available processing methods within the Gedabek Contract Area. These are agitation leach ("AGL"), heap leach of crushed material ("HLC"), heap leach of run-of-mine material ("HLROM") and flotation ("FLT"). There also will be two stockpiles, comprising of Gedabek ore generated during the life-of-mine ("LOM"), available for blending.

· AAM will decide how to process these in due course, as it depends on the blending criteria, financial factors and the quality of material from other mines in the Company's portfolio. These two types of stockpile material are denoted as "SPF" (Cu stockpile for flotation) and "ROMSP" (low-grade Au material that could be sent to ROM processing by blending with higher grade material). Copper and precious metal concentrates are also produced via a SART plant. All these processing facilities are currently in operation in the Gedabek Contract Area.

· It should be noted that due to the high-grade nature and physical properties of the material, Gadir ore is typically only processed via the AGL method. Additionally, as Gadir is fresh material (i.e. unoxidised), it is blended with other softer ores to assist during crushing.

· The proposed metallurgical processes are well-tested, being processing facilities for current mining operations in the Contract Area. The processing facilities include conventional methods that comprise comminution, gravity concentration (via Knelson concentrators), thickening, agitation leaching, resin-in-pulp extraction, elution and electrowinning to produce gold doré. For flotation, a concentrate is produced. The final products will be shipped off site for refining, in line with current practices.

· Tails from each process operation will be transferred via gravity pipeline to the existing tailings management facility ("TMF"). The TMF has enough capacity to manage the projected tails from the Gadir deposit.

· Metallurgical testwork has previously been conducted on drill and bulk truck samples in the form of bottle roll and column leach testing. This enabled amenability of the ore to leaching via AGL and static HL processes to be assessed.

· As the mine has been operating since 2015, metallurgical recoveries of the various ore types are well understood and a geometallurgical classification system has been developed for Gadir. The amount of testwork is considered representative of the processing technology to be employed.

· Deleterious elements were not detected in analytical tests or during assaying of samples (utilised in the Mineral Resource) and the Ore Reserves estimation has been based on the appropriate mineralogy to meet the specification.

Environmental

· The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.

· A previous Environmental and Social Impact Assessment ("ESIA") was carried out over the Gedabek Contract Area by Amec Foster Wheeler and TexEkoMarkazMMC, both in 2012 and submitted to the relevant Government authorities. The Gadir deposit is located within the Gedabek Contract Area for which the ESIA is valid. Processing and tailings storage reported in the ESIA has not changed since its publication and will continue to be utilised for material as part of this Ore Reserve update.

· CQA have on-site representation and they have carried out both the geotechnical and environmental assessments of the Gadir mine area. Baseline environmental monitoring is carried out via use of receptors downstream of the mine site to observe catchments located in the vicinity of the Gadir mine. Watercourses downstream of stockpiles will continue to be monitored on a routine basis for pH and heavy metal contaminants.

· Stockpile areas for waste rock have previously been identified following condemnation drilling. Waste material will continue to be utilised for infrastructure (road) construction at the Gedabek Contract Area where required. The waste rock has a low potential for acid rock drainage due to the absence of sulphide-bearing mineralisation. In total, about 20% of the waste rock is back-filled into stopes underground and is not transported to surface.

· The TMF has the capability, with an addition lift, for the extra storage requirements for Gadir process waste. The design and operations of the TMF have been reviewed by CQA along with a visit by MENR. Regular environmental monitoring is carried out at the TMF, along with monitoring of all receptors associated with the TMF. Independent reviews and third-party safety inspections of the TMF is routinely carried out. Tailings water is now returned to the process site water treatment plant (ultra-filtration and reverse osmosis) and reused in ore treatment.

· All approvals for conducting mining fall under the PSA.

Infrastructure

· The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.

· Infrastructure is considered excellent for Gadir. The deposit is located within AAM's Gedabek Contract Area with extraction rights according to the PSA. Ore can be processed at the Company's current facilities, with material being delivered by truck from the mine to processing via the constructed haul road system.

· Offices and mechanical workshop buildings are available. Power for the offices, workshop and weighbridge will continue to be via grid electrical power, with diesel generators as backup. Labour is readily available and planned extraction rates are consistent with current capacity. G&A and process labour are part of the existing company compliment of staff. Regarding accommodation, canteen facilities and associated services, the continuing exploitation of the Gadir deposit will be serviced by the current infrastructure.

Costs

· The derivation of, or assumptions made, regarding projected capital costs in the study.

· The methodology used to estimate operating costs.

· Allowances made for the content of deleterious elements.

· The derivation of assumptions made of metal or commodity price(s), for the principal minerals and co- products.

· The source of exchange rates used in the study.

· Derivation of transportation charges.

· The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.

· The allowances made for royalties payable, both Government and private.

· Project capital costs are minimal given that no additional processing facilities or manpower camps are required. The costs in relation to the facilities already referenced above are based on actual quotations, considering capital construction and local operational experience.

· Operating costs are estimated based on current mining and processing operations within the Contract Area. This is applicable as ore processing will be carried out at the same plants and mining, contractor and haulage costs are the same as current agreements.

· Treatment and refining costs are based on current contracts, as the ore will be treated in the operating processing plants and refined under the current agreements (including transport). Penalties are applicable for deleterious elements in FLT concentrate; however, studies of the concentrations of these elements show that the mined material contains deleterious elements below these penalty levels.

· Revenue was based on the USD $ Au price, USD $ Ag price and USD $ Cu price. Commodity pricing was based on forecasts by reputable market analysts. Local Azeri exchange rates are pegged to the United States Dollar (USD $). The source of exchange rates used in the study was the Central Bank of the Republic of Azerbaijan.

· Prices (USD $) for Au, Ag and Cu used in EPS® were:

o Gold: $1250 per troy ounce ($40.19 per gramme)

o Silver: $16.50 per troy ounce ($0.53 per gramme)

o Copper: $6000.00 per tonne

· Royalties have been considered as part of the cost structure for the company to operate under the PSA.

Revenue factors

· The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.

· The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.

· Prices (USD $) for Au, Ag and Cu used in EPS® were:

o Gold: $1250 per troy ounce ($40.19 per gramme)

o Silver: $16.50 per troy ounce ($0.53 per gramme)

o Copper: $6000.00 per tonne

· The selling price of each commodity is deduced from the respective market price to determine the NSR. The values used are specified by the process route and product shown in the table below. Sensitivity analysis has been used at a range of Au and Ag prices.

Processes	Selling % payable - Net of refining and transportation
	Doré			Concentrate
	Au	Ag	Cu	Au	Ag	Cu
AGL	99.95%	96.00%	86.60%
HLC	99.95%	96.00%	86.60%
HLROM	99.95%	96.00%	86.60%
FLT				97.00%	84.00%	83.00%
SPF				97.00%	84.00%	83.00%

Market assessment

· The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future.

· A customer and competitor analysis along with the identification of likely market windows for the product.

· Price and volume forecasts and the basis for these forecasts.

· For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract.

· The market for Au, Ag and Cu is well established. The metal price is fixed externally to the Company however AAM has reviewed a number of metal forecast documents from reputable analysts and is comfortable with the market supply and demand situation.

· A specific study of customer and competitor analysis has not been completed as part of this project.

· Price and volume forecasts have been studied in reports from reputable analysts, based on metal supply and demand, USD $ forecasts and global economics.

· Industrial minerals do not form part of this study.

Economic

· The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.

· NPV ranges and sensitivity to variations in the significant assumptions and inputs.

· Prices (USD $) for Au, Ag and Cu used in EPS® were:

o Gold: $1250 per troy ounce ($40.19 per gramme)

o Silver: $16.50 per troy ounce ($0.53 per gramme)

o Copper: $6000.00 per tonne

· Processing Recovery parameters for the various processing methods other than AGL have been included for comparison, in addition to Cu recovery % (all in italics):

Proceses	Recovery %
Proceses	Au	Ag	Cu
AGL	75%	66%	30%
HLC	60%	7%	30%
HLROM	40%	7%	20%
FLT	60%	68%	83%
SPF	60%	68%	83%

· Selling costs were described in 'Revenue Factors'

· Sensitivity analysis has been used at a range of Au, Ag and Cu prices. Variables that have the largest positive impact on NPV is the Au price. Conversely, the OPEX cost has a negative impact on project NPV; when these increase it impacts project economics. AAM routinely controls its operating costs.

· NPV, NPV ranges and sensitivity will not be detailed here as the information is commercially sensitive.

· A discount rate of 10.5% was used.

Social

· The status of agreements with key stakeholders and matters leading to social licence to operate.

· To the best of the CP's knowledge, agreements with key stakeholders and matters leading to social licence to operate are valid and in place.

Other

· To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves:

· Any identified material naturally occurring risks.

· The status of material legal agreements and marketing arrangements.

· The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.

· There are no known material or naturally occurring risks associated with the Ore Reserves.

· AAM is currently compliant with all legal, regulatory and marketing arrangements and agreements.

· The Gadir underground project is located within a licence area ("Contract Area") that is governed under a PSA, managed by the Azerbaijan Ministry of Ecology and Natural Resources ("MENR").

· The PSA grants AAM a number of 'time periods' to exploit defined Contract Areas, as agreed upon during the initial signing. The period of time allowed for early-stage exploration of the Contract Areas to assess prospectivity can be extended if required.

· A 'development and production period' that runs for fifteen years, commences on the date that the Company holding the PSA issues a notice of discovery, with two extensions of five years each at the option of the company. Full management control of mining within the Contract Areas rests with AIMC. The Gedabek Contract Area, incorporating the Gadir underground, Gedabek open pit and Ugur open pit, currently operates under this title.

· Under the PSA, AAM is not subject to currency exchange restrictions and all imports and exports are free of tax or other restrictions. In addition, MENR is to use its best endeavours to make available all necessary land, its own facilities and equipment and to assist with infrastructure.

· At the time of reporting, no known impediments to obtaining a licence to operate in the area exist.

· The PSA is valid for the forecast LOM.

Classification

· The basis for the classification of the Ore Reserves into varying confidence categories.

· Whether the result appropriately reflects the Competent Person's view of the deposit.

· The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).

· Measured Mineral Resources were converted to Proved Reserves after applying the modifying factors.

· Indicated Mineral Resources were converted to Probable Ore Reserves after applying the modifying factors.

· Internal dilution (< 4.3% of the Ore Reserve by mass) is considered to have the same level of confidence as the reported Mineral Resource.

· The Ore Reserve is based on a global estimate; the division of material between Proved and Probable is 72:28 respectively.

· The underground Ore Reserves contain approximately 0.08% of Inferred Mineral Resources. This near-zero value demonstrates that the Gadir deposit is understood and well-defined through exploration and grade control drilling, as well as mining development.

· The resultant Ore Reserves are appropriate given the level of understanding of the deposit geology and reflects the CP's view of the deposit.

· No Probable Ore Reserves were derived from Measured Mineral Resources.

Audits or reviews

· The results of any audits or reviews of Ore Reserve estimates.

· Datamine developed and audited the Mineral Resource and Ore Reserve models and estimations. Two Datamine engineers worked on the resources and reserves and were able to verify work practice and procedures.

· Datamine consultants have been involved with other mining projects of the company within the same contract area as the Gadir underground mine and as such are familiar with the processing methods available, value chain of the mining and cost structure.

· The data used as part of the Mineral Resources project was audited, validated and considered robust for Ore Reserves calculations.

· The Gadir Ore Reserve estimate was reviewed by the CP and was considered to be reasonable and adequately supported, consistent with industry practice for reporting Ore Reserves in accordance with the JORC Code [3].

· Internal company and external reviews of the Ore Reserves yield estimates that are consistent with the Ore Reserve results. The amount of waste material calculated as part of dilution and capital development totals 80,916 t over the LOM.

Discussion of relative accuracy/ confidence

· Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate.

· Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage.

· It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

· The Ore Reserve has been completed to feasibility standard with the data being generated from a tightly spaced drilling grid, thus confidence in the resultant figures is considered high.

· Extraction of ore from the Gadir underground mine will continue.

· Mining costs and haulage costs will be as per the current contracts in place being utilised at Gadir operation and other mines in the Contract Area.

· Project capital is well-managed, and certain infrastructure facilities are already available within AIMC/AAM, thus minimising capital requirements.

· The Modifying Factors for mining, processing, metallurgical, infrastructure, economic, gold price, legal, environmental, social and governmental factors as referenced above have been applied to the underground mine design.

· Ore Reserves calculation relates to a global scale and data reflects the global assumptions.

· An appropriate level of consideration was given to all Modifying Factors, which were established from actual operation data from Gadir, to support the declaration and classification of Ore Reserves.

· No statistical or geostatistical procedures were carried out to quantify the accuracy of the Ore Reserve. Factors which could affect the relative accuracy and confidence of the estimate have been fully assessed as part of the modifying factor derivation. Geological variability between sample points, for example very high-grade narrow zones, may impact on the Reserve statement.

· It Is concluded that the Ore Reserve for the Gadir underground mine is 797 kt, with a contained Au content of 90 koz, 304koz of Ag and 1,387 t of Cu (see Table below). Note that due to rounding, numbers presented may not add up precisely to totals.

· Zn reserves were not reported as part of the Ore Reserves summary.

ORE RESERVES	Tonnage	Gold		Silver		Copper
ORE RESERVES	kt	g/t	koz	g/t	koz	%	t
Total Proved	222	2.81	25	14.13	101	0.24	535
Total Probable	575	2.41	45	10.99	203	0.15	852
Proved + Probable	797	2.73	70	11.86	304	0.17	1,387

· Mine production data are available and were utilised in assessing the relative accuracy of the ore types and grade in the Ore Reserves. The average process feed grades were understood in order to determine the process algorithm of the different ore type. Thus, there is a direct relationship between the known grades from production data and those of the Ore Reserve estimate.

Section 5 Estimation and Reporting of Diamonds and Other Gemstones

(Criteria listed in other relevant sections also apply to this section. Additional guidelines are available in the 'Guidelines for the Reporting of Diamond Exploration Results' issued by the Diamond Exploration Best Practices Committee established by the Canadian Institute of Mining, Metallurgy and Petroleum.)

Estimation and Reporting of Diamonds and Other Gemstones is not applicable to this Statement of Resources

Appendix Two: Glossary of Terms and Abbreviations

The following definitions are extracted from the JORC Code, 2012 Edition

Cut-off grade	The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification.
Indicated Mineral Resource	An 'Indicated Mineral Resource' is 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.
Inferred Mineral Resource	An 'Inferred Mineral Resource' is 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. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to an Ore Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
JORC	JORC stands for Australasian Joint Ore Reserves Committee (JORC). The Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) is widely accepted as the definitive standard for the reporting of a company's resources and reserves. The latest JORC Code is the 2012 Edition.
Measured Mineral Resource	A 'Measured Mineral Resource' is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from 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 confirm geological and grade (or quality) continuity between points of observation where data and samples are gathered. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proved Ore Reserve or under certain circumstances to a Probable Ore Reserve
Mineral Reserves or Ore Reserves	An 'Ore Reserve' 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.
Mineral Resource	A 'Mineral Resource' is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
Modifying Factors	'Modifying Factors' are considerations used to convert Mineral Resources to Ore Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.
Probable Ore Reserve	A 'Probable Ore Reserve' is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Ore Reserve is lower than that applying to a Proved Ore Reserve.
Proved Ore Reserve	A 'Proved Ore Reserve' is the economically mineable part of a Measured Mineral Resource. A Proved Ore Reserve implies a high degree of confidence in the Modifying Factors.

Abbreviation	Definition of term
Ag	Chemical symbol for silver
Au	Chemical symbol for gold
Cu	Chemical symbol for copper
g/t	Gramme per tonne
M	Meters
Oz	Ounces
t	Tonnes
Zn	Chemical symbol for zinc

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