Georgian Mining Corporation Significant Mineral Resources at KB, Georgia (3596V)

TIDMGEO

RNS Number : 3596V

Georgian Mining Corporation

30 January 2017

30 January 2017

Georgian Mining Corporation Announces Initial Mineral Resources for the

Kvemo Bolnisi Copper Gold Project in Georgia

Georgian Mining Corporation ('GMC') is pleased to announce initial JORC-compliant Mineral Resource estimates for both the copper-gold sulphide and gold oxide deposits at the Kvemo Bolnisi East ('KB') Project based upon initial drill results from the current drill programme. Further drill results and Mineral Resource estimate updates will be released to the market over the coming weeks.

Highlights

-- Initial optimised in-pit mineable Mineral Resource estimate of 702,000 tonnes at 0.99% copper ('Cu') and 0.17g/t gold ('Au') has been estimated as part of a larger in-situ copper-gold Inferred Mineral Resource of 947,000 tonnes at 0.94% copper Cu and 0.15 g/t Au

-- Initial in-situ combined gold oxide Indicated and Inferred Mineral Resource of 204,000 tonnes at an average grade of 0.83g/t Au

-- Significant opportunities exist to substantially expand these initial Mineral Resources as an additional 7,500m of drilling is completed in H1 2017

-- GMC intends to process both copper-gold sulphide and gold oxide types of mineralisation at facilities owned by GMC's JV Partner

o Copper-gold sulphide: JV Partner's Madneuli flotation plant, located only 7 km from KB

o Gold oxide: JV Partner's nearby heap leach plants could accept all output of gold oxide mineralisation; GMC is undertaking further work to expand the gold oxide resource

GMC Managing Director Greg Kuenzel said, "We are successfully implementing our strategy to develop mineral resources at KB suitable for processing at the neighbouring Madneuli plants to generate positive and sustainable cash flow. This cash flow will allow us to fund future exploration and development to uncover the full mineral potential of KB and our entire Bolnisi JV property while minimising shareholder dilution. We look forward to providing further updates as our exploration and resource development programme progresses over the coming months."

Background

The Company's near-term focus remains the KB Project which became GMC's priority after reviewing historic exploration data and taking into account the results from initial drill-testing which led to the recent discovery hole KED004 which returned a grade of 2.57% Cu and 0.23g/t Au over 27.0 metres.

Exploration and Development Programme

GMC intends to develop a minimum JORC-compliant mineral resource of 3-5 Mt copper-gold sulphides at KB, after generating a mineable mineral resource of 1-2Mt at 1% Cu to support the first 12 to 24 months of production. On-going drilling is expected to increase the initial KB mineral resource announced herein, with the anticipated benefit that future exploration funding can be met from cash flow once production commences.

Exploration at KB has identified and defined several new drill targets based upon a combination of historic data and the results of GMC's more recent exploration consisting of soil geochemical sampling, detailed mapping, trenching and channel sampling, IP and ground magnetic geophysical surveys and drilling. These near-surface targets are all clustered within the footprint of the KB Project and are currently considered to be part of one larger centre of copper-gold mineralisation. The exploration programme has been designed to first test and develop each target into an initial discrete shallow resource and then to test for a joining of these individual shallow resources into one significantly larger mineralised resource that can potentially be exploited in one larger open pit.

The strategic objectives of this staged exploration approach are to first develop an initial near-surface 1-2 Mt mineable resource to allow for near-term production cash flow, then expand this mineable resource to 3-5 Mt to lengthen mine life and cash flow, and then to test the full extent of this mineralised system at depth and away from its centre. The full resource potential at KB is considered to be similar to the neighbouring Madneuli mine which has produced over 80 Mt of copper-gold and polymetallic ores.

Mineral Resource Estimates

Two separate mineral resources have been generated to date; a copper-gold sulphide mineral resource and a gold oxide mineral resource; refer to Table 1 below.

An in-situ copper-gold Inferred Mineral Resource of 947,000 tonnes at an average grade of 0.93% Cu and 0.15g/t Au has been estimated, which includes an optimised in-pit mineable Mineral Resource estimate of 702,000 tonnes at 0.99% Cu and 0.17g/t Au. This pit-optimised copper-gold estimate meets the guidance provided by the JV Partner and is expected to increase soon, pending the receipt of assay results from holes drilled during late December 2016 and early January 2017.

The initial gold oxide resource, comprised of in-situ combined Indicated and Inferred Mineral Resources of 204,000 tonnes at an average grade of 0.83g/t Au is very encouraging. As additional gold oxide mineralization at KB is discovered and delineated, it is expected that an average resource grade of 1g/t Au or greater will be achieved to meet the guidance given for processing in either of the JV Partner's gold heap leach processing facilities.

The Mineral Resource estimates only use data generated from drilling completed prior to mid-December 2016. On-going results from additional diamond drill holes in the current programme will generate further Mineral Resource estimate updates as additional assay results are received from the independent laboratory.

Preliminary in-house metallurgical test work that commenced in Q4 2016 has returned encouraging results indicating that the KB copper-gold sulphide feedstock would beneficially supplement similar ore feed at the JV Partner's current operations; there is no obvious evidence of deleterious elements that could negatively impact processing costs or metal recoveries. Detailed test work is soon to be commissioned based upon drill core samples from the current KB drill programme; results of this test work will be used to optimise cash flow modelling.

The resource estimation work has been undertaken by an independent external Mineral Resource estimation specialist and the process has been overseen by a second independent geological consultant.

Further information concerning the in-situ Mineral Resource estimate and pit optimisation summary are set out in the tables below.

 
                                        Indicated           Inferred           Indicated 
                                                                               & Inferred 
-----------------------------------  ---------------  -------------------  ---------------- 
 Category   Cut-Off     Zone          Tonnes Cu        Tonnes Cu            Tonnes Cu 
                                       Au               Au                   Au 
                                       (Kt) (% )        (Kt) (% )            (Kt) (% 
                                       (g/t)            (g/t)                ) (g/t) 
---------  ----------  ------------  ---------------  -------------------  ------------ 
 Cu Zones   0.3% Cu     Cu                               799 0.94 0.17        799 0.94 
                                                                               0.17 
---------  ----------  ------------  ---------------  -------------------  ------------ 
 Au Zones   0.3g/t Au   SW Area                          152 0.08 0.46        152 0.08 
                                                                               0.46 
                          Central      23 0.14 2.16        29 0.15 1.72         29 0.15 
                                                                                1.72 
---------  ----------  ------------  ---------------  -------------------  ------------ 
                                        23 0.14 2.16     1,128 0.80         1,151 0.78 
                                                          0.23               0.27 
                         ----------  -----------------  -----------------  ------------ 
 

Table 1: In-Situ Copper and Gold Tonnage and Grade Estimate

 
   Area      Cut-Off     Zone       Mill -      Heap Leach-Inferred    Total Ore 
                                   Inferred 
---------  ----------  -------  -------------  --------------------  ------------ 
                                 Tonnes         Tonnes                Tonnes 
                                  Cu Au          Cu Au                 Cu Au 
                                   (Kt)           (Kt)                  (Kt) (% 
                                   (% ) (g/t)     (% ) (g/t)            ) (g/t) 
  SW area    0.42%       Cu        702 0.99 
              Cu                   0.17 
              0.27g/t     AuOx                    154 0.08 
               Au                                 0.46 
---------  ----------  -------  -------------  --------------------  ------------ 
                                   702 0.99        154 0.08              856 0.82 
                                    0.17            0.46                  0.22 
---------  ----------  -------  -------------  --------------------  ------------ 
 

Table 2: Pit Optimisation Summary

Technical Glossary

 
 "Au"                  the chemical symbol for the 
                        element gold 
--------------------  ------------------------------------------ 
 "Cu"                  the chemical symbol for copper 
--------------------  ------------------------------------------ 
 "g/t"                 grams per tonne 
--------------------  ------------------------------------------ 
 "Indicated mineral    a part of a Mineral Resource 
  resource"             for which tonnage, densities, 
                        shape, physical characteristics, 
                        grade and mineral content can 
                        be estimated with a reasonable 
                        level of confidence. It is 
                        based on exploration, sampling 
                        and testing information gathered 
                        through appropriate techniques 
                        from locations such as outcrops, 
                        trenches, pits, workings and 
                        drill holes. The locations 
                        are too widely or inappropriately 
                        spaced to confirm geological 
                        and/or grade continuity but 
                        are spaced closely enough for 
                        continuity to be assumed 
--------------------  ------------------------------------------ 
 "Inferred mineral     a part of a Mineral Resource 
  resource"             for which tonnage, grade and 
                        mineral content can be estimated 
                        with a low level of confidence. 
                        It is inferred from geological 
                        evidence and assumed but not 
                        verified geological and/or 
                        grade continuity. It is based 
                        on information gathered through 
                        appropriate techniques from 
                        locations such as outcrops, 
                        trenches, pits, workings and 
                        drill holes which may be limited 
                        or of uncertain quality and 
                        reliability. 
--------------------  ------------------------------------------ 
 "JORC Code"           the code for reporting of the 
                        Australasian Joint Ore Reserves 
                        Committee, which is sponsored 
                        by the Australian mining industry 
                        and its professional organisations. 
                        The code is widely accepted 
                        as a standard for professional 
                        reporting purposes for reporting 
                        of mineral resources and ore 
                        reserves. 
--------------------  ------------------------------------------ 
 "m"                   metre, a unit of length as 
                        per the International System 
                        of Units. 
--------------------  ------------------------------------------ 
  "Mineral Resource"   a concentration or occurrence 
                        of material of intrinsic economic 
                        interest in or on the Earth's 
                        crust in such form, quality 
                        and quantity that there are 
                        reasonable prospects for eventual 
                        economic extraction. The location, 
                        quantity, grade, geological 
                        characteristics and continuity 
                        of a Mineral Resource are known, 
                        estimated or interpreted from 
                        specific geological evidence 
                        and knowledge. Mineral Resources 
                        are sub-divided, in order of 
                        increasing geological confidence, 
                        into Inferred, Indicated and 
                        Measured categories. 
--------------------  ------------------------------------------ 
 "Mineralisation"      the process or processes by 
                        which a mineral is introduced 
                        into a rock, resulting in a 
                        valuable or potentially valuable 
                        deposit. It is a general term, 
                        incorporating various types; 
                        e.g., fissure filling, impregnation, 
                        and replacement. 
--------------------  ------------------------------------------ 
 "Sulphide"            a compound of sulphur and some 
                        other element 
--------------------  ------------------------------------------ 
 "Gold oxides"         Near surface deposit of porous 
                        gold-enriched rocks typically 
                        containing abundant quartz 
                        and Fe-limonites, commonly 
                        formed by the meteoric weathering 
                        of gold-bearing sulphide mineralisation. 
--------------------  ------------------------------------------ 
 

Review by Competent Persons

The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Adam Wheeler, who is a fellow (FIMMM) of the Institute of Materials, Minerals and Mining and a registered Chartered Engineer (C. Eng and Eur. Ing) with the Engineering Council (UK) and reviewed by Mark Owen, BSc, MSc, MCSM, Chartered Geologist, a member of the European Federation of Geologists and a Fellow of the Geological Society.

Both Mr Wheeler and Mr Owen have sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking, to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mark Owen and Adam Wheeler have reviewed this announcement and consent to the inclusion in the announcement of the matters based on their information in the form and context in which it appears.

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 www.georgianmining.com or contact:

 
 Greg Kuenzel     Georgian Mining          Company        Tel: [phone] 
                   Corporation                             9327 
 Ewan Leggat      S. P. Angel Corporate    Nomad &        Tel: [phone] 
                   Finance LLP              Broker         0470 
 Laura Harrison   S. P. Angel Corporate    Nomad &        Tel: [phone] 
                   Finance LLP              Broker         0470 
 Damon Heath      Shard Capital Partners   Joint Broker   Tel: 0207 
                   LLP                                     186 9950 
 Elisabeth        St Brides Partners       PR             Tel: [phone] 
  Cowell           Ltd                                     1177 
 
 
 

About Georgian Mining Corporation

Georgian Mining Corporation has 50% ownership and operational control of the Bolnisi Copper and Gold Project in Georgia, situated on the prolific Tethyan Belt, a well-known geological region and host to many high grade copper-gold deposits and producing mines. The Bolnisi licence over 860 sq km has a 30 year mining licence with two advanced exploration projects; Kvemo Bolnisi East and Tsitsel Sopeli. Georgia has an established mining code and is a jurisdiction open to direct foreign investment.

This information is provided by RNS

The company news service from the London Stock Exchange

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January 30, 2017 02:00 ET (07:00 GMT)