Significant Increases at Tulkubash gold deposit

RNS Number : 6440Z

Chaarat Gold Holdings Ltd

04 September 2018

 

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Significant Increases in resource and grade at Tulkubash gold deposit

·     New study indicates 46% increase in Tulkubash Mineral Resource (Measured and Indicated) to over 1.4 million ounces of gold

·     57% Increase in Measured & Indicated Grade to 1.35 grammes per tonne gold

·     Results suggest emergence of a new world-class 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 a new, simplified, and robust geologic model.  It is an interim resource update, including results received to date from 63 diamond drill holes, comprising approximately 10,525 metres drilled since the Company's last resource update (see Press Release dated 31 January 2018).  The Company is targeting to complete a total of approximately 30,000 metres of diamond drilling at Tulkubash this year.  A subsequent resource update, comprising results from the entire drilling programme, will be prepared early in the first quarter of 2019.  The Company anticipates completing an updated reserve calculation in October 2018.

This interim resource update was prepared, and the year-end resource update will be prepared, by third-party independent consultant, Tetra Tech.

Highlights:

·     The overall contained ounces of gold in the Measured and Indicated Resource ("M&I") has increased by 443,000 ounces to 1,414,000 ounces, a 46% increase.

·     The average grade of the Tulkubash deposit has increased by 0.49 grammes per tonne ("g/t") gold ("Au") Au, to 1.35 g/t Au, a 57% increase.

·     The resource boundary has been extended 1,040 metres along strike to a total strike length of 3,200 metres, a 47% increase in strike length.

·     Infill and step-out drilling has enhanced Chaarat's knowledge of the deposit geology, mineralisation, and grade distribution.  This new information has contributed to the development of the new geologic model.

·     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 will enable recoveries to be forecast more accurately. 

·     Chaarat also now has a better understanding of the local variability and controls on mineralisation within the mineable resource, which will 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 interim resource update for Tulkubash.  Results continue to validate our belief that Tulkubash will not only continue to grow into a world-class gold deposit, but indeed is the beginning of an emerging new gold district.  The current resource boundary has been extended 1,040 metres and mineralisation has also been extended by an additional 400 metres. The mineralisation remains open along strike and we still 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 increase in overall gold grade in the M&I Resource, to 1.35 g/t Au.  This grade increase was assisted by the ongoing drilling and the revised geologic interpretation which demonstrates continuity of higher-grade lodes throughout the mineralised corridor, as well as the incremental addition of higher grade mineralisation from this year's drilling. The updated resource is based on a robust geologic model comprising two domains of higher and lower grade gold mineralisation within a structurally bound corridor.  This geology-driven model demonstrates increased continuity of higher grades compared to the previous statistically driven model.

"We are of the opinion that the significant increases in tonnage, grade, and contained ounces will have a positive effect on the new reserve estimate that the Company will complete in October.

"In addition to the updated resource model, the Company also now has an updated recovery model, relating measured metallurgical recoveries from various zones of the Tulkubash deposit to geological characteristics, principally the amount of oxide mineralisation in the ore.  This is based on updated metallurgical test work that was completed in the second quarter of this year.  The new recovery model will also be incorporated in the new reserve calculation.

"The updated resource model represents the Company's current state of geologic understanding of the Tulkubash deposit.  The Company considers that this model accurately reflects the geology of the deposit and is very robust, both geologically and geostatistically."

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	4,644,000	1.44	214,000
Indicated	28,010,000	1.33	1,199,000
Measured and Indicated	32,654,000	1.35	1,414,000
Inferred	4,600,000	0.62	91,000

Notes:

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

The effective date of the Mineral Resource Estimate is 28th August 2018. Tetra Tech 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.

Constraining the resource to the continuous higher-grade lodes more accurately reflects the mineralisation and led to a decrease in overall tonnage compared to the previous resource model, which modelled the higher-grade zones as more isolated pockets but included surrounding lower-grade mineralisation in the estimate.  The increase in overall grade of M&I Resource more than compensated for this tonnage reduction, leading to the significant increase in contained ounces of gold.  The extension of mineralised wireframe boundaries to connect the high-grade lodes also led to a drop in the ratio of Measured to Indicated Resource.  This is because as the boundaries are extended to connect the lodes, the grade interpolation statistics lose some degree of precision.  The geologic and grade continuity of the lodes is demonstrated with sufficient confidence to classify the resulting tonnages and grades as Indicated Resource.  Reserves are calculated on the sum of M&I Resource.

Resource Estimation Assumptions and Methods

Key Assumptions used to estimate the Mineral Resources are:

§ The Mineral Resource has been estimated using 10.0 metre ("m") x 10.0 m x 5.0 m (x, y, z) blocks, with minimum sub-block dimensions of 2.0 m x 2.0 m x 1.0 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.

QA/QC 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 in 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 a Resource Geologist at Tetra Tech 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 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]

Artem Volynets - Chief Executive Officer

Chris Eger - Chief Financial Officer

Numis Securities Limited                                                                              [phone]

John Prior, Paul Gillam (NOMAD)

James Black (Corporate Broking)

BMO Capital Markets Limited                                                                     [phone]

Jeffrey Couch, 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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