Anglo Asian Mining (AAZ.L) Formation of a JV, Conroy Gold and Natural Resources (CGNR.L)

Formation of a Joint Venture with Conroy Gold and Natural Resources PLC

to acquire up to a 55 per cent. interest in the Longford Down Massif gold project in Ireland

Initial 17.5 per cent. interest to be earned by Anglo Asian investing €2 million in further exploration, with its interest increasing progressively to 55 per cent., by developing

the Clontibret gold deposit to mine construction-ready status

Anglo Asian awarded warrants over 325,000 Ordinary Shares in Conroy Gold  and Natural Resources PLC, with an additional 1,625,000 warrants to be awarded on completion of the Joint Venture Agreement

Anglo Asian Mining PLC (“Anglo Asian” or the “Company”), the AIM-listed gold, copper and silver producer focused in Azerbaijan, is pleased to announce that it has entered into a non-binding Heads of Terms Agreement (“HoT”) with Conroy Gold and Natural Resources PLC (“Conroy Gold”) for a proposed joint venture. Anglo Asian will acquire, by way of the joint venture, up to a 55 per cent. interest in the Longford Down Massif gold project (the “Project”) in Ireland currently wholly-owned by Conroy Gold in exchange for committing to meet certain expenditures.

Anglo Asian has also been awarded warrants to acquire 325,000 Ordinary Shares in Conroy Gold which are exercisable immediately. Anglo Asian will be awarded an additional 1,625,000 warrants to acquire Ordinary Shares in Conroy Gold upon completion of the joint venture agreement. The additional warrants will become exercisable at certain milestones as Anglo Asian invests funds into the joint venture as set out below. The total of 1,950,000 warrants represent 7.44 per cent. of the current issued share capital of Conroy Gold.

Note that all references to “$” are to United States dollars, “£” and “pence” are references to the United Kingdom pound sterling and ” €” are references to the Euro.

Highlights

· HoT signed to acquire up to a 55 per cent. interest in the Longford Down gold project in Ireland currently wholly-owned by Conroy Gold

· The licences cover over 800 square kilometres in a major gold district in the north-east of the island of Ireland, known as the Longford Down Massif, containing significant gold targets including:

o Clontibret – an existing JORC Resource of over 500,000 ounces of gold, situated in County Monaghan, in the Republic of Ireland

o Clay Lake in County Armagh, Northern Ireland – a gold target that extends for two kilometres by one kilometre and lies at the north-eastern end of the 40 mile Longford Down gold trend

o An additional 8.8 million ounces of gold exploration targets in the Longford Down trend providing significant upside potential

· The joint venture will increase the Company’s inventory of JORC resources with a well-defined path to production

· Anglo Asian has a track record as a successful builder of mines and this experience will prove complementary to the exploration skills and local knowledge of the existing Conroy Gold team and enable the Company to rapidly drive the Project forward to production

· Many synergies such as the type of exploration and the potential mining techniques exist between the Company’s current activities in Azerbaijan and at the Longford Down Massif

· Clontibret is of a scale which will add significantly to the Company’s operations but is well within the capability of the Company to manage without impacting the development of its projects in Azerbaijan

· Ireland is an attractive mining jurisdiction, with highly prospective geology – the Republic hosts Europe’s largest zinc mine and gold mining projects are being developed across the border in Northern Ireland

Key terms of the joint venture

· The licences (and associated intellectual property) will be segregated, upon formation of the joint venture, into three separate companies in which Anglo Asian will have an initial 17.5 per cent. interest in exchange for committing to meet certain expenditures of the Primary Expenditure Programme (as defined below) subject to regulatory approvals.

· No initial payment required for the Project – Anglo Asian to acquire its 17.5 per cent. interest in each company by investing €2 million in further exploration (the Primary Expenditure Programme). Anglo Asian can increase its interest by a further 7.5 per cent. in each company on a pro rata basis in exchange for spending a further €2 million (in aggregate across the three companies) on the Primary Expenditure Programme. A minimum expenditure of €4 million will secure an interest of 25 per cent. in each company. The additional funding required to take the Clontibret licences to mine construction-ready status, together with a further €3 million in exploration work on the other licences in the Project (the Secondary Expenditure Programme) will secure the full 55 per cent. interest in each of the three joint venture companies.

· Anglo Asian will retain an interest in each of the three joint venture companies even if it does not proceed to the Secondary Expenditure Programme, the amount of which will depend on the total amount of its investment.

· The joint venture is subject to satisfactory due diligence, concluding a binding joint venture agreement (the “JV Agreement”) between Anglo Asian and Conroy Gold, regulatory approvals and the approval of Conroy Gold shareholders.

· 325,000 warrants for Anglo Asian to acquire Ordinary Shares at 16p in Conroy Gold have been issued which can be exercised immediately.

· A further 975,000 warrants at 16p per Ordinary Share and 650,000 at 26p per Ordinary Share will be issued on concluding the JV Agreement and are exercisable subject to meeting certain expenditure milestones.

Reza Vaziri, CEO, commented: “These are exciting times at Anglo Asian and I am delighted to announce this proposed joint venture with Conroy Gold which will be the Company’s first enterprise outside of Azerbaijan.

“The proposed joint venture is in keeping with the Company’s stated strategy and ambitions and will complement the Company’s existing pipeline of projects in Azerbaijan. It is of sufficient scale to considerably add to the Company’s operations, but of a size which will not adversely impact the development of our assets in Azerbaijan. Our experience in building and operating mines will combine well with Conroy Gold’s exploration skills and local knowledge and together we can drive the Project forward. Ireland, like Azerbaijan, has a stable and predictable jurisdiction for mining.

“The transaction has been designed to minimise the risk to the Company. The licences will be segregated into three companies. The joint venture agreement will ensure that all funds invested to acquire our interest will be used to further explore and develop the properties. The Company is envisaging an initial commitment to the joint venture of €4 million and will still retain a significant interest in the licences even if it decides to proceed no further after this initial expenditure. The warrants awarded to the Company will enable us to benefit from any increase in the share price of Conroy Gold as a result of their success in the joint venture.”

Stephen Westhead, Director of Geology & Mining, commented: “The Longford Down Massif includes some very highly prospective gold targets and the proposed joint venture immediately adds to the Company’s inventory of JORC resources, while also increasing exploration upside potential to the shorter term mine development targets. The Company has demonstrated its expertise in exploration through to developing projects into production. This expertise will prove transferrable to Ireland, where the proposed exploration and development programme has the potential to add to shareholder value.”

Rationale for the transaction and the benefits to Anglo Asian

Anglo Asian’s participation in the joint venture in Ireland is in line with the Company’s stated strategy of considering opportunities outside Azerbaijan which it believes can be made a commercial success. The joint venture will complement the current pipeline of projects under way in Azerbaijan and in due course will lead to growth in the overall business of the Company.

Ireland, like Azerbaijan, is considered an excellent jurisdiction in which to operate. The Republic is a stable, predicable country within the European Union with a well-developed mining industry and a government that is keen to foster further growth in the industry, as is the administration in Northern Ireland. This favourable climate will assist us to develop efficient, practicable management of our activities in both countries.

This joint venture will immediately add gold resources to our inventory and there is a well-defined path to production at Clontibret. There is also very considerable exploration upside along the rest of the Longford Down Massif.

Anglo Asian has a track record as a successful builder of mines. This experience in developing mines will prove complementary to the geological skills and local knowledge of the existing Conroy Gold team and enable the Company to rapidly drive the Project forward. It is of a scale which will add to the Company’s operations, but is also well within the capability of the Company to manage, without impacting the development of our Azerbaijan assets. Successful exploitation of this opportunity has the potential to generate real value for our shareholders.

Structure of the joint venture transaction

HoT have been signed with Conroy Gold that, subject to satisfactory due diligence, regulatory approvals and Conroy Gold Shareholder approval, will lead to a joint venture agreement between Anglo Asian Mining and Conroy Gold being concluded on the following principal terms:

· The Longford Down Massif exploration licences (and associated intellectual property) will be segregated into three joint venture companies as follows:

o Company A: Clontibret licence

o Company B: Clay Lake licences

o Company C: Other licences

· A 17.5 per cent. interest in each company will be issued to Anglo Asian on concluding the JV Agreement which will commit Anglo Asian to meet certain expenditures of up to €2 million of the Primary Expenditure Programme (as defined below).

· Anglo Asian can increase its interest by a further 7.5 per cent. in each company on a pro rata basis in exchange for spending a further €2 million (in aggregate across the three companies) on the Primary Expenditure Programme. A minimum expenditure of €4 million for the Primary Expenditure Programme will secure an interest of 25 per cent. in each joint venture company.

· The full 55 per cent. holding in each company will be earned in the event of Anglo Asian committing to the Secondary Expenditure Programme (see below) .

· Anglo Asian is to meet the following expenditure requirements for the three licence holding companies:

o Primary expenditure programme: Exploration expenditure to determine whether to proceed to the secondary stage. It is anticipated this expenditure will be around €4 million and be incurred over 18 months following the commencement of exploration.

o Secondary stage expenditure:

§ The compilation of a detailed study and obtaining all necessary consents for the mine construction for Company A. This will bring the Clontibret licence area to “Construction Ready” project status; and

§ Additional exploration expenditure for Companies B and C, totalling €3 million.

· The obligation for the land acquisition required for the Clontibret mine will be negotiated between the parties following the preparation of detailed budgets for the second stage expenditure during due diligence.

· If Anglo Asian decides not to proceed to the Secondary stage, it will retain an interest in each of the three Companies depending upon the amount of Primary stage expenditure incurred as follows:

o Less than €2 million: zero interest

o €2 million: 17.5 per cent. interest

o €2 million to €4 million: the percentage interest will be calculated pro-rata between 17.5 to 25 per cent.

o €4 million: 25 per cent. interest

· Following the Primary and Secondary stage expenditure being incurred, all further development expenditure will be met by the shareholders of the three companies in proportion to their equity holding.

· Anglo Asian has deposited €250,000 into a segregated bank account and will deposit an additional €250,000 into that account upon signing the JV Agreement. These funds will provide the initial funds for the exploration programme.

· A management committee with equal representation from both Anglo Asian and Conroy Gold will be established to run the three joint venture companies. Final control of the management committee shall in principle rest with Anglo Asian, until either Anglo Asian does not proceed to the Secondary stage or does not complete the Secondary stage expenditure.

The Longford Down Massif

The licences cover an area of over 800 square kilometres in a new “district scale” 40 mile gold trend located in the Longford Down Massif in the north-east of the island of Ireland. The trend lies along a major geological structure, the Orlock Bridge Fault Zone. A series of major gold targets have been identified along this trend. These include Clontibret and Glenish in County Monaghan and Slieve Glah in County Cavan, in the Republic of Ireland, and Clay Lake in County Armagh, Northern Ireland.

Clontibret

Clontibret is a significant discovery within the trend. The local geology at Clontibret consists of Ordovician sedimentary rocks, which lie some 1,500 metres north of the regional-scale Orlock Bridge Fault. The stratigraphy is made up of alternating units of argillite (shale or siltstone) and arenite (greywacke or sandstone) rocks. The mineralisation in Clontibret occurs in two styles – high grade lodes and a disseminated stockwork zone. A JORC Compliant resource of over 500,000 ounces of gold has been defined as part of a scoping study.

The current JORC (2012) Resource of 320,000 ounces of gold (Indicated) and 197,000 ounces of gold (Inferred) totals 517,000 ounces of gold at 2 grammes per tonne gold at a cut-off grade of 1.0 gramme per tonne of gold. According to Conroy Gold, the majority of the drilling to date is to a depth of less than 200 metres and a maximum depth of 350 metres. The deposit remains open in all directions, as well as to depth, and excellent gold intersections, e.g. 16.6 metres at 6.5 grammes per tonne of gold, have been recorded outside the current resource area.

Clay Lake

The Clay Lake gold target extends for two kilometres by one kilometre and lies at the north-eastern end of the 40 mile gold trend discovered by Conroy Gold. Gold-in-soil values averaging over 50 parts per billion of gold, including the highest gold-in-soil value seen to date, 1.53 grammes per tonne of gold, were recorded in soil samples collected over the Clay Lake target area during the area’s exploration programme. Rock chip samples in the exposed rock returned 18 metres at 0.47 grammes per tonne of gold and included three metres at 1.30 grammes per tonne gold before the exposure ceased. Subsequent drilling identified a 450 metre open-ended zone of black carbonaceous stockwork, with the second drill hole intersecting 63 metres at 0.62 grammes per tonne of gold, including nine metres at 1.48 grammes per tonne of gold.

Longford Down Trend

Additional to the Clontibret and Clay Lake targets is an area of ground of over 372 square kilometers covered by 10 exploration licences known as the Longford Down trend. An exploration target estimate of some 8.8 million ounces of gold has been published by Conroy Gold. The targets have been defined by soil geochemistry and supported by geophysical data. The Longford Down Trend forms an important part of the longer-term potential of resource to reserve development.

Warrants to acquire ordinary shares of Conroy Gold and Natural Resources PLC

Anglo Asian has been issued with 325,000 warrants to acquire new ordinary shares in Conroy Gold at 16p and will be issued with a further 1,625,000 warrants to acquire new ordinary shares in Conroy Gold (the “Warrants”) upon completion of the JV Agreement as follows:

· 975,000 Warrants to acquire ordinary shares in Conroy Gold at a price of 16p

· 650,000 Warrants to acquire ordinary shares in Conroy Gold at a price of 26p

The Warrants are exercisable as follows:

· The 325,000 already issued at 16p are exercisable immediately

· 325,000 at 16p upon €1 million being spent by Anglo Asian pursuant to a completed JV Agreement

· 650,000 at 16p upon a further €1 million being spent by Anglo Asian pursuant to a completed JV Agreement

· 650,000 at 26p upon a further €1 million being spent by Anglo Asian pursuant to the completed JV Agreement.

The Warrants can be exercised up to the third anniversary of signing the commencement of the field work protocol for the Primary stage exploration expenditure. If a JV Agreement is not concluded, the 325,000 Warrants already vested will expire on 19 January 2021 which is six months after signing the HoT. These warrants will, when exercised, together represent 7.44 per cent. of the current existing Ordinary Share Capital of Conroy Gold.

Competent Person Statement

The information in this 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 this 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 (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.

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