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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Chaarat Gold Holdings Ltd | LSE:CGH | London | Ordinary Share | VGG203461055 | ORD USD0.01 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.90 | 2.80 | 3.00 | 2.90 | 2.90 | 2.90 | 21,989 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gold Ores | 92.35M | -8.58M | -0.0124 | -2.34 | 20M |
From May 2019 to May 2024
TIDMCGH
RNS Number : 3997D
Chaarat Gold Holdings Ltd
19 February 2020
19 February 2020
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
2019 Drilling Programme delivers increase in Reserves at Tulkubash
Chaarat (AIM:CGH), the AIM-quoted gold mining Company with an operating mine in Armenia, and assets at various stages of development in the Kyrgyz Republic is pleased to announce an updated Resource and Reserve statement at its Tulkubash gold project in Kyrgyz Republic following the 20,000m drilling programme undertaken in 2019.
The objective of the drilling programme was to test targets northeast of the prior Resource boundary, enhance the project economics by adding ore to the previously defined pits, and to increase understanding of prospectivity of the wider licence area.
Drilling within the existing Resource footprint demonstrated increased continuity in and between the ore zones and was successful in optimizing pit designs. This contributed to the increase in reserves, as summarized below:
-- Proven & Probable Reserves increased from 22Mt to almost 25Mt with a slightly increased grade of 0.95 g/t compared to 0.92 g/t before;
-- The amount of ounces increased by 14% to 749 koz compared to 658 koz in the published bankable feasibility study;
-- The pit shell optimisation for the reserve update was based on a USD$ 1,300/oz gold price; and,
-- Construction continues at Tulkubash and first gold production is on track for late 2021.
In addition, the programme was successful in adding new ounces to the Resource along strike to the northeast of the prior Resource footprint, principally in the Shir Canyon area. The drilling to the northeast also disclosed significant additional mineralization that will require more drilling to demonstrate continuity to be a classified Resource in the future. This has defined a broad area of mineralisation, some of it high-grade, representing a significant target to be further explored
Artem Volynets, Chief Executive Officer, commented:
"I'm pleased to report the results of the 2019 drilling programme at our Tulkubash gold project in the Kyrgyz Republic. The drilling programme followed the announcement of the 2019 Feasibility Study and has delivered a 14% increase in the ore reserve statement to 749koz at a higher grade of 0.95g/t, adding even more years of life to what was already an economically robust project, while also improving our understanding of this exciting asset. The next phase of the work programme is focused on further developing the mine plan within the next couple of months. First production is still expected in late 2021."
UpdateD Resource Statement
The results of the 2019 drilling have been incorporated into an updated JORC-compliant Mineral Resource Estimate. To be JORC-compliant, the Mineral Resource estimate must satisfy the requirement of "reasonable prospects for eventual economic extraction." In previous years, this requirement was addressed without constraining the Mineral Resource Estimates with an constraining pit shell. Now that the Tulkubash project has advanced to construction stage, with well-defined pits, the Company has decided to constrain the Resource estimate with an constrained pit shell in order to address this requirement. This has led to a decrease in tonnage and contained ounces in the Mineral Resource, with no effect on the Reserve. At the same time it ensures that a higher percentage of the Resource will be converted to Reserve. The Company considers this to be a robust Resource Estimate.
Drill spacing is sufficient in the Main Zone, which accounts for about 77% of the Reserve, for detailed pit design. Additional infill drilling will be required in the more north-easterly pits for final pit design.
The pit shell was generated using a gold price of $1,600 / ounce Au. Operating cost parameters used were the same as used for the Reserve estimation, as presented below.
The table below summarizes the constrained updated Tulkubash 2019 year-end Mineral Resource Estimate:
Tulkubash December 2019 Resource at 0.3 g/t Au cut-off grade constrained by USD$1,600/oz pit shell
Hot Features
Premium
Class Tonnes Au (g/t) Metal (Oz)
=========== =========== ========= ===========
Measured 5,266,000 1.28 215,568
----------- --------- -----------
Indicated 18,080,000 1.21 701,976
----------- --------- -----------
M&I 23,346,000 1.22 917,545
----------- --------- -----------
Inferred 910,000 0.90 26,205
----------- --------- -----------
TOTAL 24,256,000 1.21 943,749
----------- --------- -----------
Numbers are rounded in accordance with disclosure guidelines and may not sum accurately.
The Mineral Resource has been estimated using 10.0 m x 20.0 m x 5.0 m (x, y, z) blocks, with minimum sub-block dimensions of 1 m x 5 m x 2.5 m (x, y, z).
The estimate was constrained to the mineralised zone using wireframe solid models.
Grade estimates were based on 1.5 m composited assay data.
The interpolation of the metal grades was undertaken using OK.
A cut-off grade of 0.30 g/t gold was applied to report the Mineral Resources.
The Reserve is higher tonnage than the Resource due to dilution. Grade and contained gold are higher in the Resource than in the Reserve.
The pit shell constraint reduced the Tulkubash Resource by approximately 640,000 ounces of gold that would otherwise have been included in the Resource estimate. The loss in tonnage and ounces with respect to the 2018 year-end Mineral Resource Estimate is due principally to the pit shell constraint that was not applied in 2018, which excludes from the Resource estimate mineralisation that does not fall within the $1,600 gold price pit shell. Almost all of this is due to the mineralization being too deep to support the strip ratio that would be required for open pit mining. If future drilling widens the mineralised structures, some of this mineralisation may be reclassified as Resource and possibly Reserve in the future. Several drill targets with this objective have been identified at Tulkubash. A minor proportion of the reduction in Resource is due to a somewhat more conservative modeling methodology that limits the inclusion of small structures and the strike extent of larger structures within the Resource. This increased conservatism is considered appropriate now that the project is approaching production.
In addition to the mineralisation in Shir Canyon, district-scale exploration conducted during 2019 identified several additional new target areas, confirming the Company's belief that Tulkubash has the potential to be an emerging world-class gold district. To date, only about 4.5 kms of a prospective 24 km trend has been drilled.
A JORC Table 1 appears as an Appendix to this press release.
Resource Estimation Assumptions and Methods
Key Assumptions used to estimate the Mineral Resources are:
-- The Mineral Resource has been estimated using 10 metre ("m") x 20 m x 5 m (x, y, z) blocks, with minimum sub-block dimensions of 1 m x 5 m x 2.5 m (x, y, z).
-- The estimate was constrained to the mineralised zone using wireframe solid models. The wireframes were sub-domained to isolate the sulphide zone from the mixed oxide zone.
-- Grade estimates were based on 1.5 m composited assay data.
-- The interpolation of the metal grades was undertaken using Ordinary Kriging.
-- A cut-off grade of 0.30 g/t gold has been applied to report Resources.
Quality Assurance/Quality Control Procedures: Sampling Methodology and Quality Control
All results are from diamond core holes. Samples are shipped to the ALS Global Laboratory in Kara-Balta, Kyrgyz Republic for sample preparation and assay. Gold is analysed using a 30-gramme fire assay with an atomic absorption spectroscopy (AAS) finish. A quality control/quality assurance protocol is employed in the programme which includes standards and blanks in every batch of assays. Check assays are conducted on every 20(th) sample by a second independent laboratory.
Geological Modelling Procedures
Sampling data was used to construct two wireframes representing the mineralised structures at Tulkubash in Leapfrog Geo 5. The wireframes were exported and estimated by ordinary kriging in Datamine Studio RM. Variography and exploratory data analysis was completed in [Datamine and Leapfrog Geo.
UpdateD Reserve Statement
The updated mining reserve for the Tulkubash Project based on a gold price of $1,300/oz is shown below. Total Ore Reserves are estimated at 24.6 Mt grading 0.95 g/t Au, and containing 749,000 oz of gold. Proven material constitutes 26% of the reserve while the balance is classified as Probable.
Updated Tulkubash Reserve by Classification
Classification Ore Grade Contained Au
Mt g/t Au Koz
----- ------- -------------
Proven 6.3 0.98 197
----- ------- -------------
Probable 18.3 0.93 552
----- ------- -------------
Total 24.6 0.95 749
----- ------- -------------
Numbers are rounded in accordance with disclosure guidelines and may not sum accurately.
The Reserves tonnage nominally exceeds that of the Resources Measured and Indicated because of factoring in mining dilution as part of the Reserves calculation. This is not considered when calculating the Resource.
The Reserve has an average recovery of 73.3% representing 549,000 oz Au recovered. Waste associated with the ore tonnage totals 96.4 Mt results in a strip ratio of 3.9:1. Silver is not reported as part of the reserve as its contribution to the project value is immaterial.
Breakdown of the Updated Reserves by Zone
Zone Ore Au Recovery Waste Total Strip
Ratio
Mt g/t Koz % Au Koz Mt Mt w:o
----- ----- ---- ----- ---- ------ ------ -------
Main 18.2 1.00 586 72.8 426 73.4 91.6 4.0
----- ----- ---- ----- ---- ------ ------ -------
Mid 3.9 0.75 95 76.6 73 11.7 15.6 3.0
----- ----- ---- ----- ---- ------ ------ -------
East 2.5 0.84 68 72.9 50 11.3 13.8 4.6
----- ----- ---- ----- ---- ------ ------ -------
Total 24.6 0.95 749 73.3 549 96.4 121.0 3.9
----- ----- ---- ----- ---- ------ ------ -------
The largest portion of the reserve is contained in the Main Zone (MZ) Pit (18.2 Mt). To the northeast of the MZ Pit lies the Mid Zone, composed of nine small satellite pits, accounting for a further 3.9 Mt of ore. Beyond the Mid Zone lies the East Zone, which contains another 2.5 Mt in two separate pits. The East Zone is not fully drilled off and offers the opportunity to continue growing the reserve in the 2020 drill season.
FEASIBILITY STUDY COMPARISON
The 2019 EOY reserve is associated with significantly more waste (65%) and has a 50% higher strip ratio. This is because increases in grade (+3%), recovery (+6%), and gold price (+8%) have made new mineralization at depth in the Main and East Zones economic but require more waste to be removed.
Comparison of 2019 EOY and FS Reserves
Zone Ore Au Recovery Waste Total Strip
Ratio
Mt g/t Koz % Au Koz Mt Mt w:o
----- ----- ----- ----- ----- ------ ------ -------
2019 FS 22.2 0.92 658 68.9 453 58.6 80.8 2.6
----- ----- ----- ----- ----- ------ ------ -------
2019 EOY 24.6 0.95 749 73.3 549 96.4 121.0 3.9
----- ----- ----- ----- ----- ------ ------ -------
Variance +11% +3% +14% +6% +21% +65% +50% +50%
----- ----- ----- ----- ----- ------ ------ -------
FURTHER WORK
Work is currently underway to optimize the mine plan based on the updated reserve. The optimized mine plan will be used to update the the project economic model and subsequently support a revision of the project feasibility study.
PIT OPTIMIZATION
Mining reserves were defined as a subset of Measured and Indicated resources. Whittle 4X pit optimization software was applied to the resource block model to develop a series of nested pit shells, each corresponding to a different gold price ranging from $800/oz to $1500/oz.
The cost parameters used to drive the optimization are shown in Table 1. The mining and refining costs have been updated from the 2019 feasibility study (FS) based on the finalization of each respective contract. All other operating costs are the same as those applied in the 2019 FS.
The pit slopes used during the optimization varied between 49 degrees and 55 degrees based on feasibility design recommendations for the MZ Pit area. Slopes in the Irisay Fault Zone were reduced to 45degrees and all slopes were adjusted to reflect the need for ramp access in pit walls.
Cost Parameters applied for Pit Optimization
Operating Cost Units Value
Mining (ore) $/t mined 2.73
--------------- ------
Mining (waste) $/t mined 1.89
--------------- ------
Mining (owner) $/t processed 0.34
--------------- ------
Process $/t processed 4.79
--------------- ------
G&A $/t processed 1.27
--------------- ------
Refining $/oz 9.72
--------------- ------
Royalty % 8.0*
--------------- ------
* Sliding scale royalty appropriate at Au prices of $1,000-$1,300/oz
Gold recovery for the updated reserve averaged 73%. Recovery was estimated on a block-by-block basis using oxidation state and extractions derived from metallurgical test work The improvement in recovery from the 2019 FS was due to the inclusion of new test work from the 2019 programme and results from 2017 test work revalidated.
OPTIMIZATION RESULTS
The results of the pit optimization indicated that a gold price of $1,300/oz produced the highest value shell. The shell was composed of twelve separate entities, collectively containing 23.7 Mt ore at a grade of 1.04 g/t Au and a strip ratio of 3.8:1. This pit shell was selected as the basis for developing minable pit designs.
MINE DESIGN
The shell for each separate pit was used to guide a manual design process. Constructible features such as ramps and safety benches were designed within the optimized pit limits to turn the three-dimensional surface into a minable pit design.
The contained tonnage and grade in the minable pits, was then adjusted for mining dilution and ore losses resulting from the mining process. Mining dilution was calculated directly from the block model along the ore/waste contacts. Dilution was estimated at 11% and varied from zone to zone. Ore losses from mining were applied at 2.5%.
Enquiries
Chaarat Gold Holdings Limited
Artem Volynets (CEO) +44 (0)20 7499 2612
info@chaarat.com
Numis Securities Limited
John Prior, Paul Gillam (NOMAD) +44 (0) 20 7260 1000
James Black (Corporate Broking)
SP Angel +44 (0) 20 3470 0470
Ewan Leggat (Joint Broker)
Tavistock
Charles Vivian +44 (0)20 7920 3150
Gareth Tredway chaarat@tavistock.co.uk
Barney Hayward
About Chaarat
Chaarat is a gold mining company which owns the Kapan operating mine in Armenia as well as Tulkubash and Kyzyltash Gold Projects in the Kyrgyz Republic. The Company has a clear strategy to build a leading emerging markets gold company with an initial focus on Central Asia and the FSU through organic growth and selective M&A.
Chaarat is engaged in active community engagement programmes to optimise the value of the Chaarat investment proposition.
Chaarat aims to create value for its shareholders, employees and communities from its high-quality gold and mineral deposits by building relationships based on trust and operating to the best environmental, social and employment standards. Further information is available at www.chaarat.com .
Competent Person - Mineral Reserve Estimate
The updated Mineral Reserve estimate was prepared by Chaarat engineering staff at their Bishkek offices in the Kyrgyz Republic. The work was reviewed by Peter C. Carter, BSc, MBA, P.Eng, a consulting engineer registered in the province of British Columbia, Canada. Mr. Carter is qualified as a CP as defined by the JORC code. He has reviewed the technical information related to the development of Mineral Reserves in this press release and approves their use herein.
Competent Person- Mineral Resource Estimate
The updated Mineral Resource estimate was prepared by Mr. Joe Hirst, B.Sc., M.Sc. European Geologist (EurGeol) and Chartered Geologist (CGeol). Mr. Hirst is Senior Resource Geologist at Chaarat and is a "Competent Person" (CP) as such term is defined by the JORC code.
The work was supervised by Dorian L. (Dusty) Nicol, B.Sc., M.Sc., FAusIMM, RG, who was the Company's Senior Vice President, Exploration at the time this work was conducted. Mr. Nicol is a CP as defined by the JORC code. He has reviewed the technical and scientific information in this press release relating to the Mineral Resource estimates and has approved the use of the information contained herein.
Glossary of Technical Terms
"Ag" chemical symbol for silver
"Au" chemical symbol for gold
"AuEq" the value of a tonne of mineralised material
calculated by summing the value of each contained
payable metal and expressing it as an equivalent
gold content at a given set of metals prices
"Cu"
the chemical symbol for copper
"cut off" the lowest grade value that is included in a
Resource statement. It must comply with JORC
requirement 19: "reasonable prospects for eventual
economic extraction" the lowest grade, or quality,
of mineralised material that qualifies as economically
mineable and available in a given deposit. It
may be defined on the basis of economic evaluation,
or on physical or chemical attributes that define
an acceptable product specification
"g/t" grammes per tonne, equivalent to parts per million
"Inferred Resource" that part of a Mineral 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
"Indicated Resource" that part of a Mineral 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
"JORC" The Australasian Joint Ore Reserves Committee
Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves 2012 (the "JORC Code"
or "the Code"). The Code sets out minimum standards,
recommendations and guidelines for Public Reporting
in Australasia of Exploration Results, Mineral
Resources and Ore Reserves
"koz" thousand troy ounces of gold
"Measured Resource" that part of a Mineral Resource for which tonnage,
densities, shape, physical characteristics, grade
and mineral content can be estimated with a high
level of confidence. It is based on detailed
and reliable exploration, sampling and testing
information gathered through appropriate techniques
from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced
closely enough to confirm geological and grade
continuity
"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 when reporting under JORC
"Mt" million tonnes
"oz" troy ounce (= 31.103477 grammes)
"Pb" the chemical symbol for lead
"Probable Reserve" the part of Indicated and in some cases Measured
Resource that can be mined at a profit. It includes
diluting materials and allowances for losses
"Proven Reserve" that may occur during mining.
the part of Indicated Measured Resource that
can be mined at a profit. It includes diluting
materials and allowances for losses that may
occur during mining.
"Reserve" the part of a Measured and/or Indicated Mineral
Resource that can be mined at a profit. Reserves
are subdivided in order of increasing confidence
into Probable and Proven categories when reporting
under JORC.
"t" tonne (= 1 million grammes)
"Zn" the chemical symbol for zinc
Appendix 1 to Resource and Reserve Press release
JORC Code, 2012 Edition - Table 1 report template
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Criteria JORC Code explanation Commentary
Sampling
techniques * Nature and quality of sampling (eg cut channels, * All drilling was undertaken by standard and triple
random chips, or specific specialised industry tube core barrel diamond core drilling, with all
standard measurement tools appropriate to the sampling in accordance with industry standard
minerals under investigation, such as down hole gamma techniques.
sondes, or handheld XRF instruments, etc). These
examples should not be taken as limiting the broad
meaning of sampling. * Diamond core is cut in half using a core saw,
creating half core samples typically 1.5 m in length.
* Include reference to measures taken to ensure sample
representivity and the appropriate calibration of any * Road cut samples are collected using continuous
measurement tools or systems used. random rock chips in 2.0m lengths along road cut
exposures.
* Aspects of the determination of mineralisation that
are Material to the Public Report. * Trench samples are collected from carefully cut
channels in either 1.0 or 2.0 m lengths.
* In cases where 'industry standard' work has been done
this would be relatively simple (eg 'reverse * Duplicate samples are created from coarse rejects and
circulation drilling was used to obtain 1 m samples from pulps.
from which 3 kg was pulverised to produce a 30 g
charge for fire assay'). In other cases more
explanation may be required, such as where there is * Sample preparation is undertaken at ALS Global (Kara
coarse gold that has inherent sampling problems. Balta) followed by 30 g charge fire assay with an AA
Unusual commodities or mineralisation types (eg finish. Multi-element analysis is conducted using ICP
submarine nodules) may warrant disclosure of detailed -AES after aqua regia digestion. Total Sulphur is
information. determined using a LECO analyser.
Drilling
techniques * Drill type (eg core, reverse circulation, open-hole * In 2019 a total of 19,974 m of sampling across 130
hammer, rotary air blast, auger, Bangka, sonic, etc) drillholes, and 3,240 m of sampling from channels has
and details (eg core diameter, triple or standard been completed across the Tulkubash deposit. The
tube, depth of diamond tails, face-sampling bit or totals for the project are 97,889m of sampling from
other type, whether core is oriented and if so, by 681 drillholes and 23,200m of sampling from 795
what method, etc). trenches or similar.
* Diamond drillholes are predominantly HQ size using
standard and triple tube holes reducing to NQ
diameter where ground conditions are poorer.
* Holes are drilled using contractor drill rigs.
Drill sample
recovery * Method of recording and assessing core and chip * Core recovery is measured and recorded by Chaarat
sample recoveries and results assessed. geologists, with an average recovery of +95%.
* Measures taken to maximise sample recovery and ensure * In areas of highly fractured rock triple-tube core
representative nature of the samples. drilling has been utilized.
* Whether a relationship exists between sample recovery
and grade and whether sample bias may have occurred
due to preferential loss/gain of fine/coarse
material.
Logging
* Whether core and chip samples have been geologically * Historically, core was logged geologically and
and geotechnically logged to a level of detail to geotechnically by company geologist into standard
support appropriate Mineral Resource estimation, hard copy logging sheets and transcribed into
mining studies and metallurgical studies. Microsoft Excel(R) . Since 2018, core is logged
digitally using AGR4 software.
* Whether logging is qualitative or quantitative in
nature. Core (or costean, channel, etc) photography. * Logging is performed at nominal 1.5 m intervals,
reducing to shorter lengths when required.
* The total length and percentage of the relevant
intersections logged. * Logging does cross mineralised boundaries due to the
mineralisation style being fracture controlled in a
brittle unit containing few obvious contacts.
* The core is photographed wet with photographs stored
within the database.
* All drillholes up to the end of the 2019 season have
been logged.
* Logging is to a standard suitable for the support of
a Mineral Resource Estimate.
Sub-sampling
techniques * If core, whether cut or sawn and whether quarter, * Competent core samples are split on site using a core
and sample half or all core taken. saw, while highly fractured material is sampled with
preparation a trowel.
* If non-core, whether riffled, tube sampled, rotary
split, etc and whether sampled wet or dry. * Half core samples are placed in labelled polyethylene
sample bags and weighed.
* For all sample types, the nature, quality and
appropriateness of the sample preparation technique. * All current samples are transported to ALS Global
(Kara Balta) for sample preparation and analysis,
where crushing, milling, homogenization and sample
* Quality control procedures adopted for all splitting was completed in accordance with company
sub-sampling stages to maximise representivity of standards.
samples.
* Duplicate sample for QA/QC were taken every 20
* Measures taken to ensure that the sampling is samples from crushed rejects and duplicate pulps.
representative of the in situ material collected,
including for instance results for field
duplicate/second-half sampling.
* Whether sample sizes are appropriate to the grain
size of the material being sampled.
Quality
of assay * The nature, quality and appropriateness of the * Samples collected from 2007 to 2013 were prepared and
data and assaying and laboratory procedures used and whether assayed at the IRC Laboratory in Kara Balta. All
laboratory the technique is considered partial or total. samples are analyses for gold by aqua regia digestion
tests followed by atomic absorption. Sample returning
grades higher than 0.3 g/t Au were sent to ALS Global
* For geophysical tools, spectrometers, handheld XRF (Kara Balta) for re-testing by 30 g fire assay.
instruments, etc, the parameters used in determining
the analysis including instrument make and model,
reading times, calibrations factors applied and their * The 2014 sample preparation took place at the IRC
derivation, etc. Laboratory in Kara Balta, with analysis taking place
at ALS Global (Kara Balta).
* Nature of quality control procedures adopted (eg
standards, blanks, duplicates, external laboratory * From 2017 all sample preparation and analysis are
checks) and whether acceptable levels of accuracy (ie undertaken at the ALS Global laboratory in Kara
lack of bias) and precision have been established. Balta. Referee check samples are sent to SGS Vostok
for analysis.
* Assay quality control was achieved by the use of
duplicates, blanks and standard reference material
(SRM).
* The QA/QC programme and results are in line with
industry best practice and the resultant dataset is
suitable for Resource estimation.
Verification
of sampling * The verification of significant intersections by * Below detection limit assay results have been
and assaying either independent or alternative company personnel. replaced with values of half detection limit (0.025
g/t Au) and absent values have been replaced with
0.0001 g/t Au.
* The use of twinned holes.
* Documentation of primary data, data entry procedures,
data verification, data storage (physical and
electronic) protocols.
* Discuss any adjustment to assay data.
Location
of data * Accuracy and quality of surveys used to locate drill * All collar locations are reported in Gauss Kruger
points holes (collar and down-hole surveys), trenches, mine Pulkovo 1942 Zone 12 with their locations recorded
workings and other locations used in Mineral Resource using a Leica Total Station (centimetre accuracy)
estimation.
* Downhole surveys were recorded with Reflex "EZ-shot"
* Specification of the grid system used. electronic single-shot equipment.
* Quality and adequacy of topographic control. * A Total Station survey along roads, ridges, valleys
and traverses has produced a contoured topography
across the Tulkubash Resource area.
* Regional topography data is derived from satellite
data.
Data spacing
and * Data spacing for reporting of Exploration Results. * The current data spacing, nominally fans on 80m
distribution fences, with significant areas on strike at 40m or
less, is sufficient to establish grade continuity and
* Whether the data spacing and distribution is provides sufficient support for Measured and
sufficient to establish the degree of geological and Indicated classifications.
grade continuity appropriate for the Mineral Resource
and Ore Reserve estimation procedure(s) and
classifications applied.
* Whether sample compositing has been applied.
Orientation
of data * Whether the orientation of sampling achieves unbiased * Surface drilling is inclined, attempting to cut th
in relation sampling of possible structures and the extent to e
to which this is known, considering the deposit type. mineralization at a close to normal angle to the
geological strike orientation as possible.
structure
* If the relationship between the drilling orientation
and the orientation of key mineralised structures is * Underground drilling (from previous years) was
considered to have introduced a sampling bias, this orientated normal to the strike of the structure.
should be assessed and reported if material.
* The holes were designed to provide intercepts
perpendicular to the mineralization as possible.
* The drilling dip ranges from 35 to 90(o) , strikin
g
generally between 125 and 147(o) .
Sample
security * The measures taken to ensure sample security. * Labelled samples are transported to and from the
laboratory by company personal or contractors,
employing a full chain of custody documentation
procedure.
* Reject pulps and coarse rejects are returned to
Chaarat and stored along with drill core at their
locked and secure core storage facility in Bishkek.
Audits or
reviews * The results of any audits or reviews of sampling * Chaarat's competent person visited the project during
techniques and data. the current drilling campaign and reviewed the
protocols and procedures adopted by Chaarat's company
geologists.
* Chaarat has completed an analysis of the QA/QC data.
The data is deemed appropriate for Resource
estimation.
============= ============================================================ ============================================================
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Criteria JORC Code explanation Commentary
Mineral
tenement * Type, reference name/number, location and ownership * two licenses controlling the Property: a mining (or
and land including agreements or material issues with third production) license of 700.03 ha covering the defined
tenure status parties such as joint ventures, partnerships, Mineral Resources, and an exploration license of
overriding royalties, native title interests, 6,776 ha covering prospective ground along trend to
historical sites, wilderness or national park and the northeast
environmental settings.
Point
No. X Y
* The security of the tenure held at the time of ====== ======= ======
reporting along with any known impediments to 126 77 46 55
obtaining a licence to operate in the area. 1 600 400
------- ------
126 79 46 56
2 000 900
------- ------
126 79 46 56
3 264 711
------- ------
126 82 46 60
4 604 152
------- ------
126 83 46 59
5 150 556
------- ------
126 82 46 59
6 728 261
------- ------
126 82 46 58
7 757 554
------- ------
126 79 46 55
8 776 887
------- ------
126 79 46 56
9 487 116
------- ------
126 78 46 54
10 500 800
====== ======= ======
* There are no known impediments to obtaining further
necessary licences to operate
Exploration
done by * Acknowledgment and appraisal of exploration by other * No other appraisal or exploration is being done by
other parties parties. other parties
Geology
* Deposit type, geological setting and style of * Tulkubash Formation consists of medium- to
mineralisation. fine-grained quartzites and medium- to coarse-grained
arkosic sandstones mineralized in fractures by
crackle brecciation and is oxidized and can be
processed by conventional heap-leach processes
Drill hole
Information * A summary of all information material to the * As reported in Press Release
understanding of the exploration results including a
tabulation of the following information for all
Material drill holes:
o easting and northing of
the drill hole collar
o elevation or RL (Reduced
Level - elevation above sea
level in metres) of the drill
hole collar
o dip and azimuth of the hole
o down hole length and interception
depth
o hole length.
* If the exclusion of this information is justified on
the basis that the information is not Material and
this exclusion does not detract from the
understanding of the report, the Competent Person
should clearly explain why this is the case.
Data
aggregation * In reporting Exploration Results, weighting averaging * Mineralised intercepts are defined as being above a
methods techniques, maximum and/or minimum grade truncations cut-off grade for potentially economic mineralization
(eg cutting of high grades) and cut-off grades are of 0.35 g/t Au equivalent from Leapfrog Indicators
usually Material and should be stated.
* Samples are composited prior to mineral Resource
* Where aggregate intercepts incorporate short lengths estimate to 1.5m (mean sample length). The samples
of high grade results and longer lengths of low grade are assessed for a top-cap at this stage, and any
results, the procedure used for such aggregation outliers are reduced to the capping value of 15 g/t
should be stated and some typical examples of such Au.
aggregations should be shown in detail.
* The assumptions used for any reporting of metal
equivalent values should be clearly stated.
Relationship
between * These relationships are particularly important in the * Intercepts are designed to be as close to normal to
mineralisation reporting of Exploration Results. the mineralization as possible.
widths and
intercept
lengths * If the geometry of the mineralisation with respect to * The drill hole angle in relation to the
the drill hole angle is known, its nature should be mineralization is not certain.
reported.
* All mineralized intercepts reported as apparent
* If it is not known and only the down hole lengths are thicknesses based on cross sectional interpretation.
reported, there should be a clear statement to this
effect (eg 'down hole length, true width not known').
Diagrams
* Appropriate maps and sections (with scales) and * As reported in Press Release
tabulations of intercepts should be included for any
significant discovery being reported These should
include, but not be limited to a plan view of drill
hole collar locations and appropriate sectional
views.
Balanced
reporting * Where comprehensive reporting of all Exploration * As reported in Press Release
Results is not practicable, representative reporting
of both low and high grades and/or widths should be
practiced to avoid misleading reporting of
Exploration Results.
Other
substantive * Other exploration data, if meaningful and material, * No other substantive exploration data relevant to
exploration should be reported including (but not limited to): this Press Release has been completed
data geological observations; geophysical survey results;
geochemical survey results; bulk samples - size and
method of treatment; metallurgical test results; bulk
density, groundwater, geotechnical and rock
characteristics; potential deleterious or
contaminating substances.
Further
work * The nature and scale of planned further work (eg * Further exploration focusing on strike extension and
tests for lateral extensions or depth extensions or some infill of existing Resource is targeted is
large-scale step-out drilling). planned for the 2020 season.
* Diagrams clearly highlighting the areas of possible
extensions, including the main geological
interpretations and future drilling areas, provided
this information is not commercially sensitive.
=============== =============================================================== =============================================================
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria JORC Code explanation Commentary
Database
integrity * Measures taken to ensure that data has not been * All data used in the Resource was provided by Chaarat
corrupted by, for example, transcription or keying a single Excel database, combined into a central
errors, between its initial collection and its use Excel database for verification prior to Mineral
for Mineral Resource estimation purposes. Resource estimation.
* Data validation procedures used. * Leapfrog was used to validate the database with any
errors in interval overlap and surveys reported to
Chaarat for correction.
Site visits
* Comment on any site visits undertaken by the * The Competent Person for this project is Mr. Joe
Competent Person and the outcome of those visits. Hirst B.Sc (Hons)., M.Sc., European Geologist
(EurGeol) and Chartered Geologist (CGeol). Mr. Hirst
is a Resource Geologist and Competent Person as
* If no site visits have been undertaken indicate why defined by the JORC code. Mr. Hirst visited the
this is the case. project between the 7(th) and 13(th) of August 2018
and between the 27(th) July and 6(th) August 2019.
Geological
interpretation * Confidence in (or conversely, the uncertainty of ) * Geological interpretation was based on correlating
the geological interpretation of the mineral deposit. mineralized intersections in sampling. Outcrop is
visible in a number of roadcuts, which were inspected,
to support the interpretation
* Nature of the data used and of any assumptions made.
* Interpretation was completed in Leapfrog creating
* The effect, if any, of alternative interpretations on wireframe models using indicator shells.
Mineral Resource estimation.
* The use of geology in guiding and controlling Mineral
Resource estimation.
* The factors affecting continuity both of grade and
geology.
Dimensions
* The extent and variability of the Mineral Resource * The Mineral Resource extends 4.4 km along strike,
expressed as length (along strike or otherwise), plan maximum plan width of 500 m and a maximum depth of
width, and depth below surface to the upper and lower 700m.
limits of the Mineral Resource.
Estimation
and modelling * The nature and appropriateness of the estimation * The Mineral Resources have been estimated into a
techniques technique(s) applied and key assumptions, including block model prepared in Datamine Studio RM (version
treatment of extreme grade values, domaining, 1.3). The block model comprises the following
interpolation parameters and maximum distance of parameters:
extrapolation from data points. If a computer
assisted estimation method was chosen include a
description of computer software and parameters used. o Parent cell dimensions
of 10 m x 20 m x 5 m
(x, y, z)
* The availability of check estimates, previous o Sub-cell dimensions
estimates and/or mine production records and whether of 1 m x 5 m x 2.5 m
the Mineral Resource estimate takes appropriate (x, y, z)
account of such data. * Wireframe models were created using Indicator shells
in Leapfrog, producing a potentially economic
mineralised domain
* The assumptions made regarding recovery of
by-products.
* The model is typically estimated to a depth of 450 m.
* Estimation of deleterious elements or other non-grade
variables of economic significance (eg sulphur for * Grade estimates were based on 1.5 m composited assay
acid mine drainage characterisation). data.
* In the case of block model interpolation, the block * The interpolation of grade concentration was
size in relation to the average sample spacing and undertaken using Ordinary Kriging.
the search employed.
* Au was estimated as part of this interim estimate, as
* Any assumptions behind modelling of selective mining the primary metal of interest. Ag, Sb, and As were
units. also estimated but not reported as Resource
* Any assumptions about correlation between variables. * Top cut requirements were assessed using the Parrish
method, a top-cut of 15 g/t Au was applied.
* Description of how the geological interpretation was
used to control the resource estimates. * Block model validation was completed using a full set
of statistical measures and plots, along with visual
inspection on plan and section.
* Discussion of basis for using or not using grade
cutting or capping.
* The process of validation, the checking process used,
the comparison of model data to drill hole data, and
use of reconciliation data if available.
Moisture
* Whether the tonnages are estimated on a dry basis or * Tonnage is estimated on a dry basis in accordance
with natural moisture, and the method of with the specific gravity determination.
determination of the moisture content.
Cut-off
parameters * The basis of the adopted cut-off grade(s) or quality * Au g/t cut-off grade was applied based upon grade
parameters applied. tonnage sensitivity analysis and the Chaarat 2018
Feasibility Study assumptions:
o Au price of US$ 1,600/troy
oz
o Au recovery of 64%
o Mining cost of US$
1.89/t
o Processing and G&A
cost of US$ 6.40/t
o No discount rate applied
Mining factors
or assumptions * Assumptions made regarding possible mining methods, * Mining assumptions were made in accordance with the
minimum mining dimensions and internal (or, if Chaarat 2018 Feasibility Study utilizing conventional
applicable, external) mining dilution. It is always hard rock open pit excavation.
necessary as part of the process of determining
reasonable prospects for eventual economic extraction
to consider potential mining methods, but the
assumptions made regarding mining methods and
parameters when estimating Mineral Resources may not
always be rigorous. Where this is the case, this
should be reported with an explanation of the basis
of the mining assumptions made.
Metallurgical
factors or * The basis for assumptions or predictions regarding * Basic metallurgical assumptions were drawn from the
assumptions metallurgical amenability. It is always necessary as Chaarat 2018 Feasibility Study and multiple
part of the process of determining reasonable metallurgical test work to date.
prospects for eventual economic extraction to
consider potential metallurgical methods, but the
assumptions regarding metallurgical treatment * Metallurgical test work indicates the oxide ore is
processes and parameters made when reporting Mineral amenable to conventional cyanide heap leaching.
Resources may not always be rigorous. Where this is
the case, this should be reported with an explanation
of the basis of the metallurgical assumptions made. * The life-of-mine gold recovery was estimated to be 64
%.
Environmental
factors or * Assumptions made regarding possible waste and process * An Environmental and Social Impact Assessment (ESIA)
assumptions residue disposal options. It is always necessary as is currently being prepared by Wardell Armstrong for
part of the process of determining reasonable the Tulkubash project.
prospects for eventual economic extraction to
consider the potential environmental impacts of the
mining and processing operation. While at this stage * It is assumed there will be no environmental
the determination of potential environmental impacts, impediments to advancing the Tulkubash project.
particularly for a greenfields project, may not
always be well advanced, the status of early
consideration of these potential environmental * Upon completion of the ESIA further information will
impacts should be reported. Where these aspects have be available on the full environmental and social
not been considered this should be reported with an impacts of the Tulkubash deposit.
explanation of the environmental assumptions made.
Bulk density
* Whether assumed or determined. If assumed, the basis * Bulk density values have been estimated into the
for the assumptions. If determined, the method used, block model using an inverse distance weighting
whether wet or dry, the frequency of the measurements interpolation.
,
the nature, size and representativeness of the
samples. * The density estimate was based upon 1,608 dry
specific gravity determinations, completed by Chaarat
personnel using Archimedes method.
* The bulk density for bulk material must have been
measured by methods that adequately account for void
spaces (vugs, porosity, etc), moisture and
differences between rock and alteration zones within
the deposit.
* Discuss assumptions for bulk density estimates used
in the evaluation process of the different materials.
Classification
* The basis for the classification of the Mineral * The Resource classification at the project considers
Resources into varying confidence categories. the following criteria:
* Whether appropriate account has been taken of all o confidence in the
relevant factors (ie relative confidence in sampling data and geological
tonnage/grade estimations, reliability of input data, interpretation
confidence in continuity of geology and metal values, o analysis of variogram
quality, quantity and distribution of the data). parameters
o data distribution
(based upon graphical
* Whether the result appropriately reflects the analysis and average
Competent Person's view of the deposit. distance to informing
composites)
o analysis of the quantitative
measures of kriging
performance.
* The model was classified according to the JORC (2012)
guidelines.
* The classification appropriately reflects the status
of the Resource development.
Audits or
reviews * The results of any audits or reviews of Mineral * An external peer review was conducted for this study
Resource estimates. by independent third parties. No material concerns
were raised.
Discussion
of relative * Where appropriate a statement of the relative * The Resource estimate is deemed appropriately
accuracy/ accuracy and confidence level in the Mineral Resource accurate globally, based upon the informing data and
confidence estimate using an approach or procedure deemed is suitably accounted for in the Resource
appropriate by the Competent Person. For example, the classification.
application of statistical or geostatistical
procedures to quantify the relative accuracy of the
resource within stated confidence limits, or, if such
an approach is not deemed appropriate, a qualitative
discussion of the factors that could affect the
relative accuracy and confidence of the estimate.
* The statement should specify whether it relates to
global or local estimates, and, if local, state the
relevant tonnages, which should be relevant to
technical and economic evaluation. Documentation
should include assumptions made and the procedures
used.
* These statements of relative accuracy and confidence
of the estimate should be compared with production
data, where available.
=============== ================================================================= =========================================================================
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END
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