Scythian Mining Group Ltd
22 January 2024
Scythian Mining Group Limited
("Scythian" or the "Company") 22nd January 2024
Shareholder update - January 2024
Dear Shareholder
We would like to wish all our stakeholders a Happy New Year.
We wish to take this opportunity to update you on the progress
of Scythian since the last shareholder update in February 2023.
It has been a challenging year for Kokkus, our flagship project
in Kazakhstan, after the success achieved in 2022. The business has
been constrained by a lack of funding which we had originally
expected in early 2023 from Canadian investors failing to
materialise. We were thus not able to conduct any drilling on the
project during the year, as planned.
1.0 Kokkus Au Project
We have , however, been successful in extending the licence over
Kokkus until the end of 2024, when we will convert it into a Mining
Licence , together with permission to carry out a 12,000m drilling
program plus other work during 2024 . This program is expected to
increase the resource of Kokkus to from a current 0.5m oz Au to
+1.5m oz Au and to test the other mineralised structures at K5 and
K10 which are parallel to K1,2 &3 (see Figures 1,2,3 & 4
below).
We c ontinue to move ahead with plans for a stock market listing
and remain confident of this potential opportunity . We have now
formally engaged a London broker, Tavira Securities , to assist in
specific plans for a pre-IPO fundraising of a staged $10m, to cover
the drilling and exploration costs, as well as other costs before
IPO. This funding will be sufficient to fund Kokkus through to
production stage, including a BFS (Bankable Feasibility Study), as
well as complete the ownership to 100%. It is planned to complete
the pre-feasibility study which is a key step towards the issue of
a Mining Licence , expected to be completed during late 2024. The
conversations are progressing well, and we have received a
preliminary term sheet for investment that your Board is now
considering.
We have reached agreement with one of our original shareholders
to divest our current 100% interest in the East Balkhash licence,
in exchange for cance l lation of the debt due to the investor
(c.$7.2m) plus the return to Scythian of the ir shareholding (3.8m
shares) . These shares will remain in Treasury and may be cancelled
in due course. This has the effect of providing an incremental %
ownership to all remaining shareholders. We believe this to be in
the best interests of all shareholders, and will provide a
strengthened balance sheet, to help fund future growth. Kazakhstan
continues to offer interesting acquisition opportunities, and we
are also actively evaluating a number of potential projects, that
will enhance shareholder value.
Kokkus Au Deposit
The Kokkus resource has not changed since February 2023, but our
understanding of the controlling structures has changed
substantially.
Figure 1: New Kokkus Structural Model- Kokkus is a Triplicate
Fold-Thrust system.
Currently drilling has been restricted to the small black circle
where the ore body outcrops over
500m. In 2024, drilling will increase along the strike where we
have a zone of high grade Au in soils (red /yellow dots) and there
is no outcrop, over 2km, and at depth below the initial drilling.
Also, we will target fold hinges K5 and K10 to intersect the trust
zones in these fold hinges at depth as on the surface there is a
barren silica cap which we need to drill below. The K1 thrust zone
was intersected a number of times in 2022 drilling giving a best
intersection of 56m @ 5.6g/t Au, with a high grade zone of 148g/t/m
in its core.
Figure 2: Photo of Kokkus high grade core in the K1 thrust zone
which is a mylonite zone containing a very high % of pyrite. True
width of the K1 thrust varies between 40-60m.
Figure 3: Photo of the Kokkus Outcrop and areas to be drilling
in 2024, K10 is 600m behind the K5 ridge, see Figure 5 below.
Figure 4; Digital elevation model (DEM) map showing the Kokkus
outcrop, and the relationship between K1, K5 and K10
2.0 Scythian Copper
Scythian discovered a large Cu-Au porphyry system in Kazakhstan
in late 2023. Scythian has negotiated a 50/50 joint venture with IG
Global, a US based company, and the joint venture company has
applied for 2 new exploration licences over the area. IG will fund
and carry out exploration in the first 2 years, allowing Scythian
to focus on exploring and developing of Kokkus and IPO. A new
company has been established "Scythian Copper Ltd" to hold
Scythian's interest in the project which will be a wholly owned
subsidiary of the Company.
Currently there are a number of smaller shareholders who are
interested to sell their shares at a reasonable price if other
investors are interested to increase their current stake. Should
you have interest, please contact the undersigned.
Once again we would like to thank you, as shareholders, for your
support. The year has not been without challenge, but with the
expected closure of funding we believe we are now well-positioned
to progress the original intentions of the company.
Yours faithfully
Barry Davis
President and Managing Director
Contact Via Flagstaff
Flagstaff Strategic and Investor Communications
Tim Thompson
Mark Edwards
Andrea Seymour
Anna Probert
Tel: +44 (0) 207 129 1474
scythian@flagstaffcomms.com
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January 22, 2024 02:00 ET (07:00 GMT)