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During the period, we also took the opportunity to hedge some future gold bullion sales in June

2016 due to the strength in the gold price at that time resulting from the uncertainties of the

United Kingdom’s EU referendum decision and global economic conditions. This protects the

Company against any significant downside in the price of gold whilst still giving us exposure to

any further increases in this volatile gold market. This is the first time Anglo Asian has hedged

gold sales and this transaction therefore marks another stage in the development of your

company.

Although we are obviously delighted to have returned Anglo Asian to profitability, the

reduction in our target gold production for 2016 is a disappointment. Unfortunately, the late

commissioning of the second semi-autogenous grinding (“SAG”) mill and the Gadir

development work required in August resulted in a shortfall in gold doré production in July and

August of 2,779 ounces compared to budget. These issues have now been overcome but as a

result we have had to lower our target gold production for FY 2016 from between 73,000 and

77,000 ounces to between 69,000 and 71,000 ounces.

Gedabek – mining, production and sales

Gedabek is a polymetallic deposit from which Anglo Asian produces gold, copper and silver

from its Gedabek open pit mining operation and co-located underground Gadir mine. Gosha is

our second gold and silver mine and ore mined at Gosha is transported to Gedabek for

processing, due to its close proximity. Four different processing methods are used to produce

gold, silver and copper. Agitation leaching and heap leaching (both of crushed and whole ore)

are used to produce gold doré. Sulphidisation, Acidification, Recycling and Thickening (“SART”)

and flotation are used to produce copper concentrates, which also contain some gold and

silver.

Since the beginning of 2016, we have continued to focus on optimising production at Gedabek.

The flotation plant was in operation throughout the period and we resolved the final

commissioning issues and succeeded in reducing the zinc content of the concentrate. An

important step in optimising the production from the agitation leaching plant was the

commissioning of a second SAG mill in August. Although the SAG mill was commissioned later

than anticipated, it will ensure sustainable production now it is in operation.

During H1 2016, the Company mined 835,381 tonnes of ore from its Gedabek open pit (H1

2015: 864,672 tonnes) and 55,488 tonnes of ore with a revised average content of 5.84

grammes per tonne from our Gadir underground mine.

As previously reported, low grade ore (less than 1.5 grammes per tonne of gold) is being

treated by heap leaching, whilst higher grade ore (more than 1.5 grammes per tonne of gold) is