Strong Metallurgical Test Results on Kyzyltash Ore

RNS Number : 8317W

Chaarat Gold Holdings Ltd

23 August 2022

 

23 August 2022

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Strong Metallurgical Test Results on Kyzyltash Ore

Chaarat Gold (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 the completion of the first phase metallurgical test programme performed by SGS Lakefield on its Kyzyltash gold project. The project has a current JORC-compliant Measured, Indicated and Inferred sulphide resource of 5.4 million ounces of gold at 3.8 g/t. Management estimate that the project has the potential to produce approximately 300koz per annum of gold subject to the project meeting its feasibility, permitting and development milestones.

The metallurgical test work has shown similar first stage recoveries from both pressure oxidation ("POX") and Albion^TM technologies. The Albion^TM process employs ultra-fine grinding followed by aerated cyanide leaching to extract gold while POX uses high-pressure and temperature conditions to oxidize refractory sulphides prior to gold extraction by conventional carbon-in-leach technology. Bio-oxidation ("BIOX") test work is ongoing with results expected in Q3 2022. The test work will be analysed in an economic trade-off study comparing the potential processing technologies applicable to the ore with the aim of making a final decision in 2023. Following this, Chaarat will aim to progress towards an updated feasibility study on the Kyzyltash project.

Highlights of the Metallurgical Testing Programme

-    SGS Lakefield performed flotation and oxidative treatment tests on the representative samples of the 2021 Kyzyltash drilling programme

-     Ore shown to be amenable to froth flotation recovering 87-90% of gold with a 23-24% mass pull. 

-   Leach recovery for both Albion ^TM and POX averaged 80-90% with similar results between the two processes.

Next Steps

-  Results on oxidative testwork using BIOX are expected in Q3 2022.

-     Further investigation and variability testing will be performed on all processing options to confirm the first stage results thereafter.

-   Final test results will be used to conduct an economic trade-off study to determine the preferred processing option. This study will include an assessment on flotation and full ore processing options before proceeding with other workstreams required towards an updated feasibility study.

Mike Fraser, Chief Executive Officer of Chaarat, said:

"The development of the Kyzyltash project is continuing as planned. These first results of the Kyzyltash metallurgical test work have provided confirmation that the gold is favourably recoverable with various technologies. The fact that the results from the Albion ^TM process were similar to POX is very encouraging as Albion ^TM could potentially offer a substantially simpler, lower cost means of processing Kyzyltash ore. Further testwork to confirm the preferred processing route will enable Chaarat to proceed with an updated feasibility study with the aim of unlocking the significant future value that this project can bring to Chaarat shareholders. Moreover, there exist significant synergies between Kyzyltash and the construction ready Tulkubash open pit oxide leach project which lies in the same licence area and has already proved its merits on a standalone basis. On a combined basis these two projects have the potential to develop into a significant long-life gold producing hub with the potential for further exploration upside."

The Kyzyltash Development Project

Chaarat is developing the Kyzyltash gold deposit in the Kyrgyz Republic. The deposit hosts a refractory, unconstrained resource of approximately 5.4 Moz gold at 3.8 g/t. More than 80,000 metr e s of drilling have been completed to date on the project and the current resource has been defined over 4 km of strike length within favourable geology that could extend over more than 12 km of strike length. In 2016 NFC (China Nonferrous Metal Industry's Foreign Engineering and Construction Co. Ltd) subsidiary NERIN complete d a definitive feasibility study to Chinese standards assuming $565 million in capital expenditure for an underground mine and a BIOX processing facility with ca. 75% recovery leading to an NPV ₈ of $911 million based on a $1,750/oz gold price.

The Kyzyltash sulphide gold deposit is in the same licence area as the Tulkubash. Kyzyltash represents the next stage of development for Chaarat in the Kyrgyz Republic which targets to deliver 500 koz p.a. group production through organic growth.

The Kyzyltash Metallurgical Drilling and Testwork Programme

The 2021 Kyzyltash metallurgical drill programme consisted of 16 twin drill holes totalling 3,508 metres. Drill hole locations were selected to provide sufficient material of appropriate tonnage and grade to represent the Main and Contact Zones of the Kyzyltash deposit. Sampling was conducted using large, PQ diameter core to ensure enough core was available for subsequent metallurgical testing.

In order to proceed to an updated feasibility study in accordance with global standards, no further drilling is required on the measured and indicated resource whereas management currently expects ca. 10 km of drilling to be required to upgrade the existing inferred resources to measured and indicated categories.

Sampling

The material for testing was collected from the diamond drilling program in the major minerali s ed areas of the deposit known as the Main and Contact Zones. A total of 395 m etres of minerali s ed core yielded 2,300 kg of material for the current program me in addition to future variability and pilot plant test work.  Master composites for the Main and Contact Zones were prepared for testing , grading 2.5 g/t Au and 3.6 g/t Au respectively. The material is considered representative of the potentially minable portion of the deposit by both SGS and C haarat .

Diagnostic Leaching & Mineralogy

Diagnostic leaching of flotation concentrate indicated maximum theoretical recoveries of between 75% and 86% based on area within the deposit. Diagnostic leaching of flotation tails indicated theoretical maximum recoveries of 90% and 93%, confirming that processing whole ore rather than concentrate will offer a significant increase in recovery. The assessment of flotation versus full ore treatment will be considered during the trade-off study.

Enquiries
Chaarat Gold Holdings Limited	[phone]
Mike Fraser (Chief Executive Officer)	[e-mail]
Canaccord Genuity Limited (NOMAD and Joint Broker)	+ 44 (0)20 7523 8000
Henry Fitzgerald-O'Connor
James Asensio
finnCap Limited (Joint Broker)	[phone]
Christopher Raggett
Panmure Gordon (UK) Limited (Joint Broker)	[phone]
John Prior Hugh Rich

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 through organic growth and selective M&A.

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/ .

Glossary of Technical Terms

"g/t"	grammes per tonne, equivalent to parts per million
"FA / ICP 35"	Fire Assay gold assay method / Inductively Coupled Plasma is a multi-element analytical method for determination of the element content in materials, used to assay silver, base metals etc.
"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" "PQ Core" "Probable Reserve" "Proven Reserve"	troy ounce (= 31.103477 grammes) Diamond drill core with 122.6mm hole diameter 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 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)
"QA/QC"	Quality assurance and quality control (QA/QC) procedures during exploration ensures the trustworthiness of the data produced. Quality assurance (QA) and quality control (QC) are procedures used in the laboratory to ensure that all analytical measurements made are accurate.

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