Record Gold Production at Gedabek Gold/Copper Mine

Anglo Asian Mining plc, the AIM listed gold producer, is pleased to provide an update for the quarter and year ended 31 December 2010 on operations at its flagship Gedabek gold/copper mine (‘Gedabek’) in Azerbaijan.

Overview

• Record quarterly gold (‘Au’) production figure of 19,555 ounces (‘oz’) at Gedabek
• Production for year ended 31 December 2010 totals 67,267 oz Au - exceeded 60,000 oz Au forecast
• Buoyant gold price - gold sales of 57,398 oz Au completed at an average of $1,241 per oz for the year
• Produced gold at an estimated average cash operating cost of $340 per oz Au including the Government of Azerbaijan’s share and $390 per oz Au net of the Government of Azerbaijan’s share for year ended 31 December 2010
• Strengthening operations at Gedabek:
• 240,208 tonnes of dry ore transferred during Q4 2010 onto the leach pad with an average gold content of 4.32 g/t
• 821,176 tonnes of dry ore transferred during 2010 onto the leach pad with an average gold content of 4.33 g/t
• Sulphidisation, Acidification, Recycling, and Thickening (‘SART’) operations produced 47.5  tonnes of copper (‘Cu’), 380 kg of silver (‘Ag’) and 6.8 kg Au during Q4 2010
• Total copper concentrate produced in 2010 contained 182.5 tonnes Cu, 1,460 kg Ag and 25.9 kg Au
• Sales protocol for the first 400 wet tonnes of copper concentrate agreed with government partners - first sales will be made Q1 2011
• Net debt reduced from $42.2 million at 31 Dec 2009 to $25.6 million at 31 December 2010

Anglo Asian CEO Reza Vaziri said, "This has been a transformational year for the Company, both in terms of gold production and profitability.  We have seen our gold mining operations at Gedabek improve quarter on quarter, producing a record 19,555 oz of gold for the last quarter and 67,267 oz for the year which exceeded forecast figures.  Additionally, the combination of our low operating cash costs, which averaged an estimated $340 per oz for the year, and the favourable gold price, with sales at $1,241 for the year has resulted in a substantial improvement to our balance sheet.  Furthermore, we intend to capitalise on the all time high copper price with our SART process now fully operational and first sales protocol in place, and I look forward to copper concentrate sales benefiting our bottom line for 2011.

"The year ahead looks to be promising as we continue to build our position as a mid-tier gold producer and actively look to increase the Company’s production profile through the continued exploration of the Gedabek, Ordubad and Gosha Contract Areas.  With this in mind, I believe we have a clear business strategy and will see solid growth further enhancing shareholder value in 2011."

During the quarter ended 31 December 2010, the Company produced 19,555 oz of Au at Gedabek.  This brings total production for the year ended 31 December 2010 to 67,267 oz Au, which exceeds the Board’s forecast of 60,000 oz Au for the period.  The buoyant gold price has seen Anglo Asian completing gold sales of 17,420 oz Au at an average of $1,371 per oz for the three months to 31 December 2010 and gold sales of 57,398 oz Au at an average of $1,241 per oz for the year.

The Company has a Production Sharing Agreement (‘PSA’) in place with the Government of Azerbaijan which governs how the production of each of the Company’s Contract Areas under the PSA is divided between the Company and the Government of Azerbaijan.  Currently, the Company takes ownership of 87.25% of the production at Gedabek, which accounts for the difference between the total gold produced at Gedabek and the amount of gold sold by the Company.  It should also be noted that there will always be short-term timing differences between gold production and sales.

The following summary table of gold production and prices highlights the quarter-on-quarter increase in gold production at Gedabek over the past year.

Anglo Asian estimates that its cash cost of gold produced, excluding the Government of Azerbaijan’s share for the year to 31 December 2010, was $340 per oz and the cash cost including the Government of Azerbaijan’s share is estimated at $390 per oz.  It must be noted that these figures are unaudited.

In terms of processing, Gebabek’s operations have been going from strength to strength.  During the quarter the Company transferred 240,208 tonnes of dry ore onto the leach pad with an average gold content of 4.32 g/t.  For the year to 31 December 2010, Anglo Asian has transferred 821,176 tonnes of dry ore onto the leach pad with an average gold content of 4.33 g/t.

The Company’s SART process for the recovery of the copper, in the form of a precipitated copper sulphide concentrate by-product, containing silver with commercial value is performing in line with management’s expectations.   For the three months to 31 December 2010 the Company produced copper concentrate that contained approximately 47.5 tonnes Cu, 380 kg Ag and 6.8 kg Au.  For the year to 31 December 2010, the Company produced copper concentrate that contained approximately 182.5 tonnes Cu, 1,460 kg Ag and 25.9 kg Au.

A sales protocol for the first 400 wet tonnes of copper concentrate has been agreed with the Company’s Government partners and first sales will be made Q1 2011, which will positively impact FY2011 financials.

The Company’s gross debt as at 31 December 2010 was $30.6 million.  At this date, the Company also had cash balances of $5.0 million resulting in net debt at 31 December 2010 of $25.6 million.

Additional disclosures required under Schedule 2 of the AIM Rules for Companies have been provided on the Company’s website on the Directors page (About Us > Directors).

**ENDS**

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Notes:

Anglo Asian Mining plc (AIM:AAZ) is a gold producer in Central Asia with a broad portfolio of production and exploration assets in Azerbaijan.  The Company has a 1,962 sq km prospective exploration portfolio, assembled on the back of analysis of historic Soviet geological data and held under a Production Sharing Agreement (‘PSA’) based on the Azeri oil industry.  The Company developed Azerbaijan’s first operating gold/copper mine, Gedabek, which commenced gold production in May 2009.  Gold production for the year ended 31 December 2010 totalled 67,267 oz of gold.

Anglo Asian is actively looking to exploit its first mover advantage in Azerbaijan to identify additional projects, as well as looking for other properties in Central Asia and Caucasia in order to fulfil its expansion ambitions and become a mid-tier gold and base metal production company focussed in these regions.