Anglo Asian Mining gives update on Vejnaly contact area

Economy Materials 27 October 2020 13:54 (UTC +04:00)
Anglo Asian Mining gives update on Vejnaly contact area

BAKU, Azerbaijan, Oct. 27

By Nargiz Sadikhova - Trend:

Anglo Asian Mining plc, the gold, copper and silver producer, announces an update on the conflict with Armenia and the liberation of the Zangilan district of Azerbaijan, which contains the Company's Vejnaly contact area, Trend reports citing the company.

This district forms part of the territory of Azerbaijan which has been occupied by Armenia since 1994 in defiance of the United Nations Security Council resolutions 822, 853, 874 and 884.

On 22 October 2020, the Ministry of Ecology and Natural Resources of Azerbaijan announced that the Zangilan district is now under the control of Azerbaijan.

The Zangilan district is a mineral-rich district in the south west of Azerbaijan. Under the terms of the Company's existing Production Sharing Agreement (PSA), the Company has been granted the right to exploit Vejnaly, which is close to the villages of Amirkhanly and Aghband.

The contract area covers approximately 300 square kilometres and contains the Vejnaly deposit which, according to the Soviet Classification, contains 6.5 tonnes of gold (C1 + C2) and 2.3 tonnes of gold (P1).

Vejnaly is held under the Company's existing PSA. However, the PSA will only commence in respect of Vejnaly upon notification by the Government of Azerbaijan to the Company of the cessation of all hostilities and that it is safe to access the district.

This notification will therefore "reset" the PSA to year zero for contract areas in the occupied territories. Accordingly, the Company then has the right to explore the contract area for up to five years and then develop and produce for 15 years with two five-year extensions allowed.

There has been exploitation of the natural resources in the Zangilan district during the Armenian occupation and conflicting reports on whether minimal mining has been carried out at Vejanly. However, the Company's best information is that the Vejnaly deposit has had limited exploitation. It is the intention of the Government of Azerbaijan to thoroughly inspect and assess the mineral resources in the area.

The Company is in close contact with the Government of Azerbaijan regarding co-operation on the future development of the Zangilan district.

However, the timeline for any investigation and commercial exploitation of Vejnaly is unknown as it depends, inter alia, upon safe access to the Zangilan district and security of the contract area. However, once secure, the Company plans to immediately start work at Vejnaly. The Company will update its shareholders with further developments.