Significant Increase in Resource at Tulkubash

RNS Number : 9987L

Chaarat Gold Holdings Ltd

02 January 2019

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

Not for release, publication or distribution to United States newswire services or for release, publication or dissemination in the United States and does not constitute an offer of the securities herein.        

This press release does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction.  Any securities described in this press release have not been, and will not be, registered under the US Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws. There is no public offering of the securities in the United States expected. 

2 January 2019

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Significant Increase in Resource at Tulkubash gold deposit

·     Tulkubash Measured and Indicated (M&I) Mineral Resource now over 1.6 million ounces of gold, a 15% increase since the September 2018 interim resource update

·     Continuity of mineralization demonstrated

·     Results continue to suggest emergence of a significant new gold district

Chaarat (AIM: CGH), the AIM quoted exploration and development company developing the Chaarat Gold Project in the Kyrgyz Republic, is pleased to announce a Joint Ore Reserves Committee ("JORC") compliant Mineral Resource update for its Tulkubash oxide gold deposit in the Kyrgyz Republic. 

This resource update is based on the simplified and robust geologic model that was used for the mid-September interim resource update (see the Company's press release dated 4 September 2018). This 2018 year-end resource update includes results from the latest 48 diamond drill holes, comprising approximately 9,370 metres, drilled since the September resource update. An updated reserve estimate and financial model for the Tulkubash deposit based on the year-end resource model are being prepared and should be completed by end-February 2019. Drilling since the September 2018 update has focused on infill drilling within the current strike length with the objective of improving the quality of the resource in terms of continuity and reserve conversion.

Highlights:

·     The overall contained ounces of gold in the Measured and Indicated Resource ("M&I") has increased by 210,000 ounces to 1,624,000 ounces, a 15% increase.

·     Discovery costs in 2018 were approximately $11.40 /ounce of M&I resource, and 33 ounces of gold per metre drilled.

·     There has been a 15% increase in metal within the same drilled strike length of 3,200m due to discovery of new mineralization and extension of known gold lodes within the existing footprint. Mineralization remains open along strike and the remainder of the 24-kilometre strike length of prospective geology remains undrilled.

·     The average grade of the Tulkubash deposit has decreased by 0.15 grammes per tonne (g/t) gold (Au), to 1.2 g/t Au, relative to the September 2018 update, due to the inclusion of some lower grade resource in the northeast strike extension. This decrease in grade is compensated by an increase in tonnage and continuity of mineralization.

·     The current M&I Resource comprises an additional 653,000 ounces of gold compared to the resource that was the basis of the 2018 Feasibility Study (see the Company's press release dated 30 April 2018), comprising 971,000 ounces of gold. This represents a 67% increase.

·     Infill drilling has further enhanced Chaarat's knowledge of the deposit geology, mineralisation, and grade distribution. This new information should contribute to more efficient and cost-effective future exploration.

·     Chaarat now has a better understanding of the distribution of oxide mineralisation within the Tulkubash deposit. This knowledge, combined with the results of Chaarat's recently completed metallurgical test programme, has permitted modelling which should enable recoveries to be forecast more accurately.

·     Chaarat now has a better understanding of the local variability and controls on mineralisation within the mineable resource, which should provide an excellent basis for short-term mine planning.

Dorian L. (Dusty) Nicol, the Company's Technical Director and Head of Exploration, commented:

"We are very excited by this year-end resource update for Tulkubash. Discovery costs per ounce and ounces discovered per metre drilled are outstanding and continue to validate our belief that Tulkubash will continue to grow into a world-class gold deposit. Indeed, we believe this is the beginning of an emerging new gold district.  The mineralisation remains open along strike and we have drilled only a small portion of the prospective 24-kilometre trend of favourable geology and surface gold occurrences.

"We are further encouraged by the continuing increase in the M&I Resource within the current strike length. The addition of new mineralisation and demonstration of continuity of mineralisation as well as the updated metallurgical recovery model will be incorporated in the ongoing reserve and financial model updates."

Resource Summary

Table 1: Tulkubash Deposit Resource Summary (0.30 g/t Au cut-off)

Classification	Resource
	Tonnes	Grade Au (g/t)	Contained Metal Au (troy oz)
Measured	5,660,000	1.35	246,000
Indicated	36,300,000	1.18	1,378,000
Measured and Indicated	42,000,000	1.20	1,624,000
Inferred	2,330,000	0.46	33,000
Total	44,330,000	1.16	1,657,000

Notes:

Numbers are rounded in accordance with disclosure guidelines and may not sum accurately.

The effective date of the Mineral Resource Estimate is 31 December 2018. Chaarat has adopted the definition of Mineral Resources as outlined within the JORC code (2012) in order to classify the Resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

Infill drilling the resource further defines the continuous higher-grade lodes and has added a further 9.3mt to the resource model, which modelled the higher-grade zones as more strike continuous structures but included surrounding lower-grade mineralisation in the estimate for strike continuity.  The decrease in overall grade of M&I Resource for continuity has added tonnage, leading to the increase in contained ounces of gold within the same strike length.   Reserves will be calculated on the sum of M&I Resource. Measured classification has been given to those resources within the main pit which exhibit excellent slope of regression between block and sample variance. Indicated classification has been given to those resources which have a high degree of geological continuity and reasonable estimation performance.

Resource Estimation Assumptions and Methods

Key Assumptions used to estimate the Mineral Resources are:

§ The Mineral Resource has been estimated using 25.0 metre ("m") x 25.0 m x 10.0 m (x, y, z) blocks, with minimum sub-block dimensions of 2.5 m x 2.5 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 strongly mineralised main zone from the gold mineralisation in the main structural corridor.

§ Grade estimates were based on 3.0 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 4.2. The wireframes were exported and estimated by ordinary kriging in Datamine Studio RM. Variography and exploratory data analysis was completed under Snowden's Supervisor.

Competent Person

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" as such term is defined by the JORC code. Mr. Hirst 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.

The Competent Person with overall responsibility for this press release for the Company, and who has reviewed the information contained herein, is Dorian L. (Dusty) Nicol (FAussIMM), the Company's Senior Vice President, 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 Martin Andersson (Executive Chairman)	[phone]
Artem Volynets (CEO)	[e-mail]
Numis Securities Limited
John Prior, Paul Gillam (NOMAD)	[phone]
James Black (Corporate Broking)
Powerscourt
Conal Walsh	[phone]
Isabelle Saber Sam Austrums	[e-mail]

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.

On 30 October 2018, Chaarat announced that it had entered into a binding sale and purchase agreement to acquire the Kapan mine in Armenia from Polymetal, for a consideration of US$55 million, subject to adjustments (the "Kapan Acquisition"). On 14 December 2018, the Company issued the Readmission Document relating to the Kapan Acquisition.

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 

NOTICE

This announcement includes statements that are, or may be deemed to be, "forward-looking statements".  These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "envisages", "estimates", "anticipates", "projects", "expects", "intends", "may", "will", "could", "seeks" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy plans, objectives, goals, future events or intentions.  These forward-looking statements include statements regarding the Company's and the Directors' current intentions, beliefs or expectations concerning, amongst other things, investment strategy, financing strategy, performance, results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which the Group (which, where used in this announcement, shall have the meaning given to that term in the Readmission Document) will operate.

By their nature, forward-looking statements involve risks (including unknown risks) and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.  Forward-looking statements are not an assurance of future performance.  The Company's actual performance, results of operations, financial condition, liquidity and dividend policy and the development of the business sector in which the Group will operate, may differ materially from those suggested by the forward-looking statements contained in this announcement.  In addition, even if the Company's performance, results of operations, financial condition, liquidity and dividend policy and the development of the industry in which the Group will operate, are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.

Any forward-looking statements in this announcement reflect the Company's and the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the matters referred to above.  Other than in accordance with the Company's obligations under the AIM Rules for Companies, the Company does not undertake to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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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