Exploration Drilling Update

RNS Number : 2724W

Chaarat Gold Holdings Ltd

31 July 2018

 

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Chaarat Exploration Drilling Continues to Extend Tulkubash Mineralisation

Road Town, Tortola, British Virgin Islands (31 July 2018)

Chaarat (AIM: CGH), the AIM quoted exploration and development company developing the Chaarat Gold Project in the Kyrgyz Republic, is pleased to provide an update on its 2018 exploration drilling programme at its Tulkubash oxide gold project.  This press release presents results obtained since the Company's last exploration update on 10 July 2018.

Highlights

·     Approximately 8,000 metres have been drilled to date of the planned 30,000 metre 2018 drilling programme (2,000 metres since last update).  Eight drill rigs are currently in operation on site.

·     Gold mineralisation is confirmed to continue further along strike northeast of the existing one million ounce resource and continuity of new mineralisation is demonstrated.  The 2018 drilling campaign has extended mineralisation approximately 1,000 metres along strike since publication of the current resource estimate and 200 metres since the last exploration update reported on 10 July 2018.

·     New shallow, low strip ratio mineralisation has been identified within the current pit design.

·     Significant intercepts include:

o  Section 600, Hole DH18T388: True width of 26.0 metres at 1.15 grammes per tonne ("g/t")  gold ("Au") from a depth of 27.0 metres.

o  Section 2920, Hole DH18T394: True width of 11.20 metres at 1.89 g/t Au from a depth of 82.5 metres.

o  Section 3240, Hole DH18T385: True width of 30.7 metres at 0.70 g/t Au from a depth of 41.0 metres and additional true width of 19.5 metres at 4.33 g/t Au from a depth of 207.5 metres.

o  Section 3320, Hole DH18T393: True width of 5.6 metres at 1.13 g/t Au from a depth of 111.0 metres.

·     Road cuts have exposed new, sub-outcropping ore-grade mineralisation in Segment V: 7.0 metres at 0.83 g/t Au, 9.0 metres at 0.34 g/t Au, and 8.0 metres at 0.34 g/t Au.

·     Interim Resource Update expected in September 2018 and an updated Resource Estimate, following the completion of this year's exploration programme, is expected to be completed in Q1 2019.

Dorian L. (Dusty) Nicol, Chair of the Company's Technical Committee, commented:

"We continue to be very encouraged by the results from our ongoing drilling and surface exploration programme at Tulkubash.  As we had expected, drilling continues to demonstrate along strike extension of mineralisation to the northeast of the currently defined resource.  Ongoing exploration continues to generate new targets, further validating our belief that we have, to date, delineated only a small portion of a large, emerging gold district.  The earlier indications that the gold grade appears to be increasing to the northeast of the current resource are being confirmed.  We also continue to identify new, shallow mineralisation within the current open pit outline.  This represents additional mineralisation not included in the current resource estimate.  Due to its shallow depth and its location within the current open pit design, we consider this mineralisation to have a high likelihood of conversion to reserve, with a corresponding positive effect on project economics.

"In addition to the increase of new volumes of mineralisation, our drilling is adding valuable geologic data which will be used to further optimise and validate our model of the Tulkubash mineralisation.  Our understanding of geologic controls of gold grade throughout the Tulkubash deposit, as drilled to date, and of the distribution of oxidation within the currently defined open pit, are particularly useful in this regard.

"I remain highly optimistic that this year's exploration programme will lead to a significant increase in both the size and the grade of the Tulkubash deposit.  Results to date are sufficiently encouraging that we have engaged Tetra Tech to undertake an independent interim Resource Update, which will be completed in September 2018.  This will of course be followed by a year-end update on completion of the year's drilling and exploration.  All of our drilling is designed to target new resources with a high likelihood of conversion to reserves. 

"We will continue to provide periodic updates of results from our ongoing drilling and exploration programme."

Drilling Update

In planning the 2018 drill programme, the Company has defined five along strike segments within the current Tulkubash trend.  The existing one million ounce Tulkubash resource is located in segments I to III.  Segment IV represents the immediate along strike extension of the current resource.  Segment V represents the area with the strongest along strike gold in soil geochemical anomalies and represents Chaarat's highest priority drill targets.

Drilling to date has focused on testing drill targets in Segment IV, immediately along strike to the northeast of the current one million ounce Tulkubash resource.  Drilling continues to add strike length to the mineralisation, which has now been extended at least 1,000 metres along strike from the current resource boundary.  Mineralised intersects in Segment IV are comparable in width to those in Segments II and III (particularly Segment III) of the currently defined Tulkubash orebody, although thinner than those within Segment I.  The results are highly encouraging and confirm that mineralisation extends to the northeast of the current resource. 

Drilling in Segment IV continues to intersect multiple zones of gold mineralisation in every drill hole, with mineralisation of generally higher grade than in the currently defined resource. Some newly identified lodes are beginning to show continuity along strike (e.g. Sections 3240 and 3320, demonstrating continuity of mineralisation identified in Section 3160 that was reported in the Company's update on 10 July 2018). Mineralisation appears to be getting stronger to the northeast, where drilling has commenced, and additional drill targets are being developed in the highly prospective Segment V.

Drilling in Segment I is adding low strip ratio mineralisation and will also provide valuable information for possible remodeling of sulphide-oxide distribution.  This will be examined during the next resource re-estimate.

Sampling of new road cuts has identified new, sub-outcropping mineralisation: 7.0 metres at 0.83 g/t Au, 9.0 metres at 0.34 g/t Au, and 8.0 metres at 0.34 g/t Au in Segment V. A priority of drilling in Segment V will be to test this surface mineralisation for vertical extent.

The following link provides a plan and cross-sections showing the locations of the drill holes as well as tabulations of the drill assay data:

http://www.rns-pdf.londonstockexchange.com/rns/2724W_1-2018-7-31.pdf

The gold mineralisation in Segment IV is strongly oxidised.  This can be gauged by the percentage of contained gold determined to be easily recovered by cyanide solution (cyanide soluble assay).  In this batch of samples, 498 of 601 cyanide soluble assays received to date are greater than 80 per cent of contained gold with only 35 samples less than 60 per cent.  This suggests that this mineralisation would give good recovery by heap leach.  Mineralisation appears to be increasing in both grade and intensity to the northeast (Segment V) and drill rigs are being moved in this direction as drill road construction permits.  Construction of drill roads continues to expose new alteration and mineralisation along strike from the current resource in both Segments IV and V.  As this newly recognised mineralisation is mapped and sampled, it continues to lead to additional drill targets.  Meanwhile, surface geological mapping and geochemical sampling continues in advance of drill road construction, particularly in Segment VI.  This work also continues to disclose new zones of mineralisation and is generating additional drill targets.

Additional drilling this year continues to focus on drilling untested footwall targets in Segments I and II that would delineate additional low strip ratio mineralisation within the estimated resource footprint.  Results from this portion of the drilling programme are highly encouraging so far.  Drilling in these segments will also provide valuable information on the relative distribution of oxide and sulphide mineralisation, which is expected to have a positive impact on the resource, both in terms of tonnage and overall grade.

Significant intercepts from seven drill holes on five sections are summarised in the table below.  The sections are in general 80 metres apart.  Significant intercepts are defined as intercepts greater than 10 metres in width above a 0.25 g/t Au cut off or greater than 3.0 metres in width at a 0.25 g/t Au cut off assaying greater than 1.0 g/t Au or a minimum equivalent grade x thickness. 

		Drilling			Approx
Drill		Interval		Width	true width	Au
Hole	Cross Section	From	To	(m)	(m)	g/t
DH18T388	600	7.50	19.50	12.00	10.40	1.34
DH18T388	600	27.00	57.00	30.00	26.00	1.15
DH18T388	600	94.50	105.00	10.50	9.10	0.95
DH18T388	600	144.00	148.50	4.50	3.90	1.92
DH18T388	600	199.50	208.50	9.00	7.80	2.90
DH18T386	2920	91.50	99.00	7.50	7.00	1.34
DH18T394	2920	82.50	94.50	12.00	11.20	1.89
DH18T394	2920	117.00	121.50	4.50	4.25	1.97
DH18T395	3000	57.00	67.50	10.50	8.75	0.29
DH18T395	3000	135.00	147.00	12.00	10.00	0.58
DH18T384	3240	166.50	174.00	7.50	7.00	1.49
DH18T385	3240	41.00	74.00	33.00	30.70	0.70
incl	3240	53.00	57.50	4.50	4.25	2.65
incl	3240	53.00	54.50	1.50	1.40	5.70
incl	3240	59.00	60.50	1.50	1.40	2.08
DH18T385	3240	207.50	230.00	22.50	19.50	4.33
DH18T393	3320	111.00	117.00	6.00	5.60	1.13

All results are from diamond core holes.  The sample intervals are constrained by geology and range from a minimum of 0.4 metres to a maximum of 1.5 metres, generally averaging near 1.5 metres in length.  Mean grades are calculated at the stated cut-off with no upper cap applied.  The maximum length of internal waste in any interval is 3.0 metres.  Approximate true width is estimated from cross sectional interpretations.

Five additional holes in Segment IV (DH18T364 on Section 2600, DH18T387 on Section 2760, DH18T366 on Section 2840, DH18T377 on Section 2840, and DH18T383 on Section 3000) and three holes in Segment I (DH18T376 on Section 760, DH18T357 on Section 1120 and DH18T370 on Section 1200) intersected gold mineralisation, but below the threshold to be considered significant.  Nonetheless, they indicate extension of the gold-bearing system, which like all such gold mineralised systems tends to pinch and swell along the controlling structure(s).

An updated Resource Estimate will be prepared after completion of this year's planned drilling programme; this updated estimate is expected to be completed in Q1 of 2019.  Results to date from this year's drilling are sufficiently positive that the Company has engaged an independent consultant (Tetra Tech) to prepare an interim Resource Estimate.  This interim update will be completed in September 2018.  The Company believes this update will demonstrate an increase in both size and grade of the Tulkubash deposit.

QA/QC Procedures: Sampling Methodology and Quality Control

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. 

Competent Person

The Competent Person with overall responsibility for this press release, and who has reviewed the information contained herein, is Dorian L. (Dusty) Nicol (FAussIMM), the Company's Technical Director and Head of Exploration.  He is a geologist with more than 40 years of experience in the resource industry who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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'.  He has supervised the work which is the subject of this release.  Mr. Nicol consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Enquiries

Chaarat Gold Holdings Limited                                                                   [phone]

Martin Andersson - Chairman                                                                    [e-mail]

Linda Naylor - Company Secretary

Numis Securities Limited                                                                              [phone]

John Prior, Paul Gillam (NOMAD)

James Black (Corporate Broking)

BMO Capital Markets Limited                                                                     [phone]

Jeffrey Couch, Neil Haycock,
Thomas Rider (Joint Broker)

Blytheweigh (Financial PR)                                                                          [phone]

Tim Blythe

Megan Ray

About Chaarat Gold

Chaarat Gold is an exploration and development company operating in the Kyrgyz Republic with a large, high grade resource - the Chaarat Gold Project. The Company's key objective is to become a low-cost gold producer generating significant production from the development of the Chaarat Gold Project. Chaarat is engaged in an active community engagement programme 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 in the Kyrgyz Republic by building relationships based on trust and operating to the best environmental, social and employment standards.

Further information is available at www.chaarat.com 

Glossary of Technical Terms

"Au"	chemical symbol for gold
"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)
"Reserve"	the economically mineable part of a Measured and/or Indicated Mineral Resource
"t"	tonne (= 1 million grammes)

 

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