Tulkubash Reserve and Resource Update

RNS Number : 5200M

Chaarat Gold Holdings Ltd

24 May 2022

 

24 May 2022

Chaarat Gold Holdings Limited

("Chaarat" or "the Company")

Tulkubash Reserve and Resource Update

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 the results of the revised JORC compliant Tulkubash Mineral Resource Estimate ("MRE") and Ore Reserves ("OR") estimate following the 2021 drilling programme.

Highlights

·   Contained gold ounces in the Ore Reserves increased by 13% to 647 thousand ounces ("koz") compared to 571 koz in the 2021 bankable feasibility study (BFS).

·   Proven & Probable Reserves increased from 20.9Mt to 23.1Mt (+11%) with a slightly increased grade of 0.87 g/t compared to 0.85 g/t (+2%) in the BFS;

·   The pit shell optimisation for the Ore Reserve was based on a USD$ 1,600/oz gold price vs USD 1,450/oz gold price in the 2021 BFS as per latest long term gold price forecasts.

The targeted 2021 drilling programme has resulted in an improved Mineral Resource model which has contributed to an increase in Ore Reserves. Contained gold in the Measured and Indicated Resources remains unchanged at 789 koz, while Measured and Indicated Resources decreased from 28.5 to 25.1 Mt (-12%) and gold grade increased from 0.86 g/t to 0.98 g/t (+14%). The Inferred Resources have decreased as a result of more conservative constraining factors applied to the MRE. Drilling within the existing Mineral Resource footprint demonstrated increased continuity in and between the ore zones and was successful in improving the pit designs.

Further exploration conducted at Tulkubash during 2021 identified several additional new target areas, confirming the Company's belief that Tulkubash has the potential for further mine life extensions. To date, only about 5 kms of a prospective 24 km trend has been systematically drilled. An additional 4 kms of the prospective trend has been trenched and drill tested in 2021, confirming further perspectivity to the northeast.

Mike Fraser, Chief Executive Officer, commented:

"I'm pleased to report the results of the 2021 drilling programme at our Tulkubash gold project in the Kyrgyz Republic. The drilling has delivered a 13% increase in gold in the Ore Reserve to 647koz at a grade of 0.87g/t, adding about a year of production to what was already an economically robust project, while also improving our understanding of this exciting asset."

UpdateD MINERAL Resource Statement

The objective of the 2021 drilling programme was to upgrade Inferred and unclassified Mineral Resources in the mid zone and east area for potential conversion to Ore Reserves. For further information on the drilling campaign please refer to the 2021 release here .

The results of the 2021 drilling have been incorporated into an updated JORC-compliant Mineral Resource Estimate. The new block model and MRE addresses the recommendations of the external consultants that reviewed the 2021 BFS MRE.

The table below summarizes the updated Tulkubash end of year 2021 Mineral Resource at 0.21 g/t Au cut-off grade constrained by a USD$1,800/oz pit shell. Operating cost parameters used were as per the 2021 BFS.

Table 1. End of Year 2021 Mineral Resource Estimate ("EOY 2021")

Classi fication	Tonnes (Mt)	Au (g/t)	Metal (Oz)
Measured	-	-	-
Indicated	25.1	0.98	789
M&I	25.1	0.98	789
Inferred	11.2	0.62	222
TOTAL	36.3	0.87	1,011

·     Figures are rounded in accordance with disclosure guidelines. 

·     The Mineral Resource was estimated using 5 m x 5 m x 5 m (x, y, z) blocks, with minimum sub-block dimensions of 1 m x 1 m x 1 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 Ordinary Kriging. 

·     The Mineral Resource was bounded by a pit shell based on a gold price of $1,800/oz Au. 

·     A cut-off grade of 0.21 g/t Au was applied to report the Mineral Resources. 

A JORC Table appears as an Appendix to this press release.

UPDATED ORE Reserve Statement

The updated Ore Reserve for the Tulkubash project based on a gold price of $1,600/oz is shown below. Total OR are estimated at 23.1 Mt grading 0.87 g/t Au and containing 647 koz of gold. This is an 13% increase in contained gold in Proven & Probable Reserves compared to the 2021 BFS OR.

Table 2. 2022 Tulkubash Ore Reserve Estimate ("2022 OR")

Classification	Ore (Mt)	Grade (g/t Au)	Contained Au (koz)
Proven	--	--	--
Probable	23.1	0.87	647
Total	23.1	0.87	647

Notes to the Ore Reserve Statement:

1)        This statement of Ore Reserves has been prepared by Mr. Peter C. Carter, an independent consulting mining engineer, based on a review of work performed by Chaarat Gold and associated technical staff.

2)        Mr. Carter is a member of the Association of Professional Engineers and Geoscientists of British Columbia and is qualified as a Competent Person under the JORC Code, 2012.

3)        There are no Proven Reserves as drillhole density and historical data quality do not support Measured Resources.

4)        Tonnages are in metric tonnes.

5)        Figures have been rounded to three significant figures.

6)        Ore Reserves are reported inclusive of mining dilution (10%) and mining recovery (97.5%).

7)        A gold price of US$1,600/oz was used in the preparation of the estimate.

8)        Ore Reserves are based on a marginal cut-off grade of 0.22 g/t Au.

9)        Estimated metallurgical recovery for the Ore Reserve is 74.0% based on a geo-metallurgical model.

10)     Reserve is contained in a minable pit design generated from an optimised pit shell based on a gold price of $1,350/oz

The Ore Reserve has a strip ratio of 2.9:1 and an average recovery of 74.1% representing 479,000 oz Au recovered. By-product silver is not reported as part of the reserve as its contribution to the project value is immaterial.

Changes from 2021 BFS

While tonnes have decreased in the EOY 2021 MRE gold grade has increased from the BFS as has waste and strip ratio. Wire frames have been revised, a variable rather than fixed gold recovery has been developed. These changes are summarised in table 3. Details can be found in the MRE Report that is available on our homepage.

Table 3. Comparison of EOY 2021 MRE and 2021 BFS MRE

	M&I	Au		Inferred	Au		Recovery
	Mt	g/t	Koz	Mt	g/t	Koz	%
EOY 2021	25.1	0.98	789	11.2	0.62	222	74.1
2021 BFS	28.5	0.86	789	21.4	0.56	388	73.6
Variance	-3.4	0.12	-	-9.8	0.06	166	0.5

The additional 2021 infill drilling targeted areas led to an increase in Ore Reserves and an improved recovery model. The updated pit design also resulted in a slightly increased strip ratio.

Table 4. Comparison of 2022 and 2021 BFS Ore Reserves

	Ore	Au		Recovery		Waste	Total	Strip Ratio
	Mt	g/t	Koz	% Au	Koz	Mt	Mt	w:o
2022 OR	23.1	0.87	647	74.1	479	66.4	89.5	2.9
2021 BFS	20.9	0.85	571	73.6	420	54.0	74.9	2.6
Variance	2.1	0.02	76	0.5	57	12.4	4.6	0.3

The largest portion of the Ore Reserve is contained in the Main Zone (MZ) Pit (19.8 Mt). To the northeast of MZ lies the Mid Zone, composed of six small satellite pits, accounting for a further 3.1 Mt of ore. Further northeast lies the East Zone, which contains another 0.2 Mt in a single separate pit. The East Zone is not fully drilled off and offers the opportunity to continue growing the Ore Reserve in the coming drill seasons.

Table 5. Breakdown of the updated Ore Reserves by Zone

Zone	Ore	Grade	Metal	Waste	Total	Strip Ratio
	Mt	g/t Au	Koz Au	Mt	Mt	w:o
Main	19.8	0.90	570	55.6	74.8	2.8
Mid	3.1	0.66	65	9.4	12.5	3.1
East	0.2	1.46	12	1.4	1.6	5.7
Total	23.1	0.87	647	66.4	89.5	2.9

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/ .

Competent Person- Mineral Resource Estimate

The information in this announcement that relates to exploration results is based on and fairly represents information and supporting documentation prepared by Dimitar Dimitrov, P. Geo, AIG member and a Competent Person as defined in the 2012 edition of the JORC Code 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and is a Qualified Person under the AIM Rules . Mr. Dimitar Dimitrov is a full-time employee of the company. Mr. Dimitrov consents to the publication of this new release dated May 24^th, 2022 by Chaarat. Mr. Dimitrov certified that this news release fairly and accurately represents the information for which he is responsible.

Competent Person -Ore Reserve Estimate

The updated Ore 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 Competent Person as defined by the JORC code (2012) and a Qualified Person under the AIM Rules. He has reviewed the technical information related to the Ore Reserves in this press release and approves their use herein.

Quality Assurance/Quality Control Procedures: Sampling Methodology and Quality Control

All results used in the mineral resource estimate are from mostly diamond core drill holes, only 2020 drilling is reverse circulation. All core samples are cut along its long axis, half core packed, weighted and 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. External check assays are conducted on every 20^th sample by a second independent laboratory, SGS Vostok Limited Lab in Chita, Russia.

Geological Modelling Procedures

Only drilling data was engaged in the Resource estimation, although channels, trenches, and road cuts assays were used for ore zones interpretation as well. The Tulkubash deposit is interpreted as a brittle shear zone, formed in a shallow epithermal environment, consisting of a SW-NE corridor of low-grade mineralization, hosting a series of discrete, higher grade, steeply dipping lodes. Only the oxidized portion of the mineralisation is targeted for the planned conventional open pit mining and further heap leaching. The ore wireframes, including low- and high-grade types has been generated manually from section to section. Gold grades estimation was done by using Ordinary Kriging (OK), and Inverse Distance Weighting (IDW2) approach was used for the Silver and density interpolation. Micromine^TM  was used in the process of ore modelling, variography and resource estimation.

Pit Optimisation

Ore 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, corresponding to a range of gold prices from $1,000/oz to $1,800/oz.

Technical and economic parameters applied to drive the optimization are based on those from the 2021 FS. Cost parameters used to define the Ore Reserve are shown in the table below.   A gold price of $1,600/oz, based on consensus forecasts for the operating period, was used to value the resulting pit shells.

The pit slopes used during the optimization varied between 49 degrees and 55 degrees based on feasibility design recommendations for the MZ Pit area.

Table 6. Cost Parameters applied for Pit Optimization

Operating Cost	Units	Value
Mining (ore)	$/t mined	2.5 5
Mining (waste)	$/t mined	1.83
Mining (owner)	$/t processed	0.34
Process	$/t processed	4.79
G&A	$/t processed	1.27
Refining	$/oz	9.78
Royalty	%	1 4 .0*

* Sliding scale royalty appropriate at Au prices of $1,501-$1,600/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 2021 FS was due to the inclusion of more, highly oxidized material from the Mid and East Zones in the reserve.

Optimisation Results

The results of the pit optimization indicated that a gold price of $1,350/oz produced the highest value shell with the lowest risk. The shell was composed of seven separate entities, collectively containing 21.8 Mt ore at a grade of 0.97 g/t Au and a strip ratio of 2.9:1. 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 computer-aided, manual design process. Constructible features such as ramps and safety benches were designed within the optimised pit limits to turn the three-dimensional surface into a minable pit design.  The result of the pit design process was an ore reserve within 5% of the optimised minable resource.

The tonnage and grade in the minable pits, was adjusted for mining dilution and ore losses expected from the mining process. Mining dilution was calculated directly from the block model along the ore/waste contacts. Average dilution was estimated at 10% and varied from zone to zone. Ore losses from mining were applied at 2.5%.

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 that may occur during mining.
"Proven Reserve"	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.
"Ore Reserves"	the part of a Measured and/or Indicated Mineral Resource that can be mined at a profit. Ore 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: JORC_Table

JORC Code, 2012 Edition - Table 1 report template

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary
Sampling techniques	·     Nature and quality of sampling (eg cut channels, random chips, or specific specialized industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. ·     Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. ·     Aspects of the determination of mineralization that are Material to the Public Report. ·     In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples 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 coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.	·     Sampling comprises predominantly wireline diamond drilling core, along with channel sampling from trenches, road cuts and underground adit. Limited RC drilling program was completed in 2020 as well ·     Data from the surface trenches, road cuts and underground adit has been used during the interpretation of the mineralization, but was excluded from interpolation process ·     Core was drilled through the full expected mineralization intersection, as normal to the strike and dip as possible ·     All drilling is diamond core, standard or triple-tube, predominantly at HQ diameter. Half core, cut along the core axis, has been used for sampling ·     All the trench and road cut sampling were done with ordinary hammer, following marked sample boundaries ·     The average down-hole sample length is 1.5m, the average trench and road cut sample length is 2.0m ·     The average sample weight is approx. between 4-6 kg ·     1.0 m samples were collected from a cyclone, using a riffle splitter, during the RC drilling process ·     Samples were split along the major lithological breaks ·     All the sampling practices are meeting the industry standards ·     Handled XRF instrument was also available, and certain data from core and road cut measurements made through the exploration activities is available as well, although this data is not used directly for the current mineral assessment
Drilling techniques	·     Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.).	·     Almost, only diamond core drilling was conducted in Tulkubash project, except 2020 campaign, when limited RC drilling was completed ·     All the available drilling is included in MRE_update_21, 729 holes with total length of 102,406.2m (incl. 24 holes / 2,760.3m at 2021 and 21 RC holes - 2,434.3m at 2020) ·     Additional 13 orientated, geotechnical holes (completed at 2021), with a total length of 1,549.9m are providing structural and lithological data, but were not included in the current Resource modelling ·     HQ was used as a major drilling diameter, PQ (at the hole upper levels and NQ at the hole deeper zones) were also sporadically used, aiming to guarantee best drilling performance in fractured host rock ·     124mm drilling diameter was used in the RC drilling ·     For better core recovery triple - tube was used in the critical areas ·     The majority of the drilling is inclined, SE or NW orientated, aiming to intercept the expected mineralization strike as normal as possible ·     Overall, no orientation was applied in the drilling campaigns, although more than 3,300 orientated structural measurements are available after the geotechnical drilling, in Main Pit area ·     The used drilling equipment was in good condition, provided and operated by local subcontractor with wide experience in central Asia region ·     All drilling procedures are meeting the industry standards
Drill sample recovery	·     Method of recording and assessing core and chip sample recoveries and results assessed. ·     Measures taken to maximize sample recovery and ensure representative nature of the samples. ·     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.	·     Core recovery is logged as percent of the core recovery length VS drill run length, and it is measured by company's geologists and technicians, directly in the core boxes, immediately after the core is transported to the field core shed ·     Through the drilling process, in an attempt to maximize the core recovery were used triple - core tube and additive drilling muds ·     Overall diamond core recovery is above 90% ·     RC drilling recovery is approx. 80% (based on the recovery weights) ·     The average down-hole sample length is 1.5m (1m for RC) ·     The average trench / road cut sample length is 2.0m ·     All samples were split along the observed major lithological breaks ·     There doesn't appear to be a relationship bias between grade and length, or sample weight and recovery ·     All sampling practices are meeting the industry standards
Logging	·     Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. ·     Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. ·     The total length and percentage of the relevant intersections logged.	·     The implemented core logging protocol is documented: lithology, hydrothermal alteration, oxidation stage, degree of fracturing, mineralization, structures, RQD, core recovery, and RMR based logging for the geotechnical holes. Entire core is regularly photographed. ·     Total length of the logged drill holes is 103, 956.2m (including geotechnical) ·     Total length of the logged surface workings (trenches, road cuts and profiles) is approx. 38km ·     Each day, the core was transported to the field core storage area for logging. The core trays are wooden, including wooden cover as well, to prevent losses or extra moving ·     Core logging is done by company's geologists in laptops, using AGR 4.0 software as a base platform. Before using AGR platform, the logging was done on the hard copy and further transcribed into Microsoft Excel ·     Surface workings logging was done by company's geologists and / or sub-contractors, under the supervision of company's geologists ·     Photo documentation is done on wet trays, and data is also incorporated in the database. ·     At the end of the field season all core is transported at the main core storage facility, in Malovodnoye village, located close to Bishkek ·     Logging procedures are meeting the industry standards, and are reasonable for Mineral Resource estimation
Sub-sampling techniques and sample preparation	·     If core, whether cut or sawn and whether quarter, half or all core taken. ·     If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. ·     For all sample types, the nature, quality and appropriateness of the sample preparation technique. ·     Quality control procedures adopted for all sub-sampling stages to maximize representivity of samples. ·     Measures taken to ensure that the sampling is 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.	·     All of the drilled core is sampled, except the initial diluvium / alluvium zones ·     All intact core samples are cut along its long axis, using core saw, half core is packed in a labelled polyethylene bag, weighted, and further transported to laboratory for sample preparation and assaying. In case of intensively fractured zones, samples are taken with trowel ·     All in situ bedrock, outcropped in trenches and new road cuts were sampled as well ·     Rock density measurements are using field Archimedes' principle, approach with wax. Density sampling was designed as per 1 sample (approx. 10 cm) for each 5 meters (at 2021) and 1 sample per each 20m in the historical campaigns. In areas of intensively fractured material the interval is wider due lack of proper material. No density was measured at 2020 campaign as, RC drilling is not providing intact material ·     The collection of geological data meets the industrial standards
Quality of assay data and laboratory tests	·     The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. ·     For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. ·     Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.	·     Samples collected from 2007 to 2014 were prepared and assayed at IRC Laboratory in Karla Balta, Kyrgyzstan. ·     Sample collected from 2017 to 2019 were prepared and analysed at ALS Global (Karla Balta), and referee check samples were sent to SGS Vostok Limited (Chita, Russa) ·     2020 (RC drilling) and 2021 campaigns were used Steward Assay and Environmental Laboratories LLC (Karla Balta, Kyrgyzstan). SGS (Chita, Russia) was used for an external control laboratory at 2021 campaign ·     Through the sample preparation process, the entire sample is crushed to passing 90% at 2mm. Two pulps are made by pulverizing to 85% passing 0.075 mm. One pulp is return to the company as duplicate, the second one is analysed, including:  - Fire assay - lead collection with AA - Aqua Regia digestion with following ICP-OES reading - Analyses of Stotal, Ssulphide, Ssulphate, by chemical treatment and LECO, for certain selected samples (above 0.25 ppm Au) - LeachWELL analysis for certain selected samples ( above 0.25 ppm Au) ·     Lower detection limit for Au is 0.05ppm and for Ag is 1ppm ·     Assay quality control was achieved using, reference material (standards, provided by RockLab), blank material (barren sediments), coarse and pulp duplicates, along with field duplicates (applied in for first time at 2021 campaign), and external laboratory control sampling ·     The QA/QC design and results are adequate to support estimation of Mineral Resource
Verification of sampling and assaying	·     The verification of significant intersections by either independent or alternative company personnel. ·     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.	·     No twin holes have been conducted at Tulkubash area ·     All the assay results are received electronically as an Excel spreadsheet, and further incorporated in the database by company's database manager ·     The access to the database is limited, and only authorized employees can make corrections in it ·     Prior to data interpretation, the lower detection limits of Au (0.05 ppm) are changed to half of the detection limit (0.025 ppm). In regard to Ag same formula (half of the lower detection limit) was applied. For the elements with results restricted by upper detection limit, a conservative formula y = x*1.01 was applied ·     Data entry procedures and QA/QC verification meet the industrial standards and adequate to support MRE
Location of data points	·     Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. ·     Specification of the grid system used. ·     Quality and adequacy of topographic control.	·     All collar locations are reported at Gauss Kruger Pulkovo 1942 Zone 12 ·     The survey is conducted, using Lecia Total Station (centimetre accuracy) ·     All the holes have been downhole surveyed, measurements taken between 25 - 50m interval, using REFLEX EZ SHOT tool ·     The topographic model is based on satellite data ·     Roads, drill sites and other topographic details have been added after on-the-ground survey made by field survey team ·     The quality of the topographic control is adequate for MRE and meet the industrial standards
Data spacing and distribution	·     Data spacing for reporting of Exploration Results. ·     Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. ·     Whether sample compositing has been applied.	·     The hole collars are in accordance with existing profiles, designed perpendicular to the mineralised zones ·     Main Pit area achieves average distance between the drilling profiles of 40m ·     At 2021 campaign, additional infill holes were located in several most promising clusters at Tulkubash Middle Zone and East Zone, aiming to upgrade the existing data, and to decrees the average drilling space of these clusters up to 40m (sufficient to upgrade the Inferred Resource to Indicated) ·     Database from trenches, road cuts and adits were used only for the interpretation process, but excluded from the grade interpolation ·     The drilling grid allows to establish grade continuity and estimation parameters such as average grade and mineralization volume ·     Sample compositing of 1.5m was applied prior to interpolation process (1.0m for the RC drilling)
Orientation of data in relation to geological structure	·     Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. ·     If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	·     All the exploration holes were designed in attempt to intercept the expected NE strike of the mineralization as normal as possible, and to avoid any sampling biases. The average bearing is SE or NW, with drilling angle approx. 50 degrees
Sample security	·     The measures taken to ensure sample security.	·     The samples are sufficiently secure, with security guards in the entry, on both - field camp and Malovodnoye core shed
Audits or reviews	·     The results of any audits or reviews of sampling techniques and data.	·     The following independent audit was completed out during the entire period of exploration works at Tulkubsh project: ·     SRK consulting (Update of Mineral Resource Estimates, for Chaarat Gold Project, Kyrgyzstan, Feb. 2010) ·     Wardell Armstrong (Tulkubash Resource Modelling, Apr.2011) ·     Gustavson Associates (Chaarat Gold Project Resource Estimation, June 2014) ·     GeoSystems International (Mineral Resource Update, Jan.2018) ·     Tetra Tech (Competent Person Report for Chaarat Gold Project, Kyzrgyz Republic, Dec.2018) ·     Sound Mining (Competent Person's Report on Tulkubash Gold Project, for Chaarat Gold Holdings Limited, Jan 2019) ·     LogiProc (Tulkubash Gold Project Bankable Feasibility Study Update Report, Aug.2019) ·     Wardell Armstrong (Review of Modelling Estimation and Classification, based on Resource Model, provided by IGT up to June 2020) ·     Roscoe Postle Associates Inc. (RPA), part of SLR Consulting (RPA Due Diligence of Tulkubash Resource Model, based on Resource Model provided by IGT up to  June 2020) ·     Institute of Geotechnologies (IGT) (The Tulkubash Gold Project Mineral Resource Estimate, for Chaarat ZAAV SJSC, Dec. 2020)

Section 2 Reporting of Exploration Results

Criteria	JORC Code explanation	Commentary
Mineral tenement and land tenure status	·     Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. ·     The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	·     Chaarat ZAAV CJSC (CZ) is established in Kyrgyz Republic, and is wholly - owned subsidiary of Chaarat Gold Holding Ltd (Chaarat). ·     CZ is developing Tulkubash Gold Project (Project) located in the Sandalash Range of the Alatau Mountains in the Chatkal district of the Jalal Abad region (province) of north-western Kyrgyzstan ·     The Property is located at latitude 42°1'6.91" N and longitude 71°9'39.04" E and is close to the border with Uzbekistan. The Project site is located approximately 300 km southwest of the capital Bishkek, 60 km northeast of the regional administrative center of Kanysh-Kiya in the Chatkal Valley, and 300 km by road from the nearest railway station in Shamaldy-Say ·     CZ sole holds two licenses, controlling the Property. ·     Mining (production) license: #3117AE of 700.03ha, valid to 2032 is covering defined Mineral Resources of SW part of the Property, which comprising Main Pit / Middle Zone and East Zone areas. ·     Exploration license # 3319AP, valid till October 2023 (including retain option), with area of 6776 ha is covering prospective ground in NE direction. ·     CZ is obtaining consent of the local state administration and the local governments of Chatkal Region, required to conduct exploration work ·     As per Kyrgyz Republic legislation, land allocation is granted for subsoil use (e.g. road construction, industrial sites, or other infrastructure facilities) for the term of license validity ·     CZ bear a full legal responsibility for compliance with environmental requirements under Kyrgyz Republic legislation. CZ is required to obtain relevant environmental permits, make quarterly payments for environmental pollution as per Kyrgyz Laws and submit reports on compliance with environmental requirements
Exploration done by other parties	·         Acknowledgment and appraisal of exploration by other parties.	·     Initial reconnaissance commences in Soviet era, in regard with identified antimony mineralization. Following the breakup of Soviet Union, Apex Asia in joint venture of Newmont Overseas Ltd complete approx. 1800m drilling and conduct geophysical survey. After 2002 CZ was formed and have acquired what is now known as Chaarat Mining License. Till 2021 CZ manage to confirm the presence of economic gold mineralization in the SW area of the Property and to opened room for further exploration in NE direction
Geology	·     Deposit type, geological setting and style of mineralisation.	·     Chaarat Gold Project (Project) is located within Tien Shan Metallogenic Belt, a Hercynian fold and thrust belt, with length more than 2,500 km. Tien Shan belt consists of three tectono-stratigraphic units, each divided by major structural zones, and is thought to represent accretionary prisms, on the margin of proto-Eurasian continent. The Project is located in the middle Tien Shan province, made of Ordovician - Carboniferous fragments. Structurally, the t errain is intensively deformed by pre and post mineralization structural activities, dominated by SE and NW verging fore / back thrusts and steep N-NE strike-slip faults. Genetically, the mineralization system could be reference to "Orogenic" and "Intrusion Related" types. It has NE strike and is thought to be closely related with structurally controlled Permian aged magmatism. ·     Two main host rock / mineralization types can be outlined in the deposit. Oxidized type of gold mineralization, hosted in Devonian silicified sandstones of Tulkubash formation, represented by relatively steep, NE striking lenses, controlled by series of dilatational jogs. The second type of mineralization is unoxidized Au zone, containing refractory gold, hosted in Ordovician flysch complex, dominated by fine-grained black shales, locally appeared in green-schist facies, and with features of comprehensive structural deformations and contact metasomatism. Both ore types are thought to relate to one hydrothermal system, developed in different facies due to difference in the host rock and the stratigraphic position ·     2021 infill drilling (and Mineral Resource update) was conducted in Middle Zone and East Zone, which along with Main Pit area are part of the oxidized Tulkubash mineralization type
Drill hole Information	·     A summary of all information material to the 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.	·     Appproximately 105 km drilling have been carried out in the Tulkubash area after 2000, including RC and Geotechnical drilling. ·     The 2021 drilling campaign is including approx. 2,760m (shown in the table below), aiming to update the available Resource Model, particularly in its Middle Zone and East Zone: BHID Az DIP East North RL Depth DH21T587 140 -55 12680050 4657226 2853 134.6 DH21T588 140 -55 12680084 4657241 2855 163.1 DH21T589 140 -47 12679982 4657121 2781 80.1 DH21T590 140 -50 12680458 4657549 2722 80.7 DH21T591 140 -55 12680481 4657579 2725 80 DH21T592 135 -55 12680602 4657748 2821 140 DH21T593 135 -60 12680894 4658292 3084 175.2 DH21T594 136 -70 12681103 4658543 3117 149.8 DH21T595 135 -50 12680948 4658294 3063 110.2 DH21T597 136 -50 12681105 4658543 3117 71.5 DH21T599 135 -60 12680739 4658062 2997 90.5 DH21T600 135 -65 12680706 4658090 3021 150.4 DH21T602 135 -50 12680771 4658146 3034 150 DH21T606 95 -55 12681281 4658537 3037 100.2 DH21T609 135 -55 12681179 4658588 3132 80.5 DH21T610 135 -50 12681182 4658740 3129 85 DH21T611 135 -58 12681146 4658608 3146 150.4 DH21T612 135 -60 12681226 4658634 3120 85 DH21T613 135 -50 12680097 4657281 2857 130.2 DH21T614 135 -65 12680042 4657176 2819 120.4 DH21T616 135 -50 12681190 4658682 3139 160 DH21T617 135 -60 12681151 4658663 3156 85.1 DH21T618 136 -50 12681231 4658755 3140 60.2 DH21T619 135 -58 12679996 4657168 2817 127.2
Data aggregation methods	·     In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. ·     Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. ·     The assumptions used for any reporting of metal equivalent values should be clearly stated.	·     Middle Zone and East Zone holes done in 2021 were incorporated into existing block model from 2020, aiming to upgrade the Inferred Resources in these areas. ·     Overall, the results from 2021 exploration campaign, have available grade intercepts, with COG of 0.21g/t, accepted for Tulkubash style mineralization, certain rules are applied. For a maximum length of interval below the COG, but included in the calculations, is considered 6.0m. Each interval should start and end with sample >= COG. For top cap grade is considered 20 ppm, weighted averaging (length X grades) techniques are used for mean grades calculations ·     No Au equivalent was used
Relationship between mineralization widths and intercept lengths	·     These relationships are particularly important in the reporting of Exploration Results. ·     If the geometry of the mineralization with respect to the drill hole angle is known, its nature should be reported. ·     If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. 'down hole length, true width not known').	·     Middle Zone / East Zone collars are supported by sufficient amount of historical data, aiming to avoid any significant fluctuation between the intercepts and the true width
Diagrams	·     Appropriate maps and sections (with scales) and 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.	·     Wide variety of 2D and 3D graphics, maps, plots and wireframes are available, the combination of which is fully sufficient to visual description of the reported data
Balanced reporting	·     Where comprehensive reporting of all Exploration 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.	·     Middle Zone and East Zone results from 2021 will be used for updating the last available Mineral Resource model for Tulkubash area, prepared by Institute of Geotechnologies (IGT) in Dec. 2020
Other substantive exploration data	·     Other exploration data, if meaningful and material, should be reported including (but not limited to): 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.	·     Along with the Resource update made 2021, several other technical assessments for Tulkubash area were also done, including geotechnical / hydrogeological drilling in Main Pit area based on 13 holes (approx. 1,550m) ·     Acid Rock Drainage (ARD) survey for Tulkubash's Main Pit area is in progress
Further work	·     The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling). ·     Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.	·     Magnetic drone-based geophysics in the whole Property area, including Tulkubash area, is planned to define additional exploration targets. ·     The Karator and Ishakuldy exploration targets of Tulkubash stile, outlined on 2 and 5 km to northeast are planned for further resource definition drilling.

Section 3 Estimation and Reporting of Mineral Resources

Criteria	JORC Code explanation	Commentary
Database integrity	·     Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes. ·     Data validation procedures used.	·     The field data is compiled on the site and further combined, verified and stored in AGR 4.0 database platform, and in Excel spread sheets as well. ·     Prior the process of the Resource Modelling, the historic data and the new available one, were verified one more time, using Micromine software ·     The database used for the Mineral Resource update report has been previously audited by Gustavson and Associates (2014), by GeoSystems International (2018), by Sound Mining (2019), by IGT (2020)
Site visits	·     Comment on any site visits undertaken by the Competent Person and the outcome of those visits. ·     If no site visits have been undertaken indicate why this is the case.	·     Last field visit by Competent Person was made between 25.08.2021 to 02.09.2021 by Dimitar Dimitrov ·     Mr.Dimitar Dimitrov P. Geo, AIG member and a Competent Person as defined in the 2012 edition of the JORC Code 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves', is a full-time employee of the company.
Geological interpretation	·     Confidence in (or conversely, the uncertainty of ) the geological interpretation of the mineral deposit. ·     Nature of the data used and of any assumptions made. ·     The effect, if any, of alternative interpretations on Mineral Resource estimation. ·     The use of geology in guiding and controlling Mineral Resource estimation. ·     The factors affecting continuity both of grade and geology.	·     Mineralization and associated hydrothermal alteration, developed along a system of regional structural deformations, is genetically associated with Permian magmatism ·     Tulkubash mineralization zones are presented by series of dilatational jogs, hosted in silicified sandstones ·     No hard borders can be outlined, as all Tulkubash mineralization is host rock has similar facies ·     The interpretation is based on gold distribution, using actual drilling, trenches and underground adits ·     Overall, there is a good level of confidence in the geological continuity, although detailed drilling is required to advance the interpretation of the different mineralization lenses ·     The wireframing process is using 0.2 ppm and 0.7 ppm Au to contour high and low grade domains. ·     The low grade domains are considered as Resource outer shell, while the high grades are incorporated within it
Dimensions	·     The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.	·     The Mineral Resource extends approx. 4, 900m along strike, with maximum plan width of 500m, maximum depth below surface of approx. 300m
Estimation and modelling techniques	·     The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used. ·     The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data. ·     The assumptions made regarding recovery of by-products. ·     Estimation of deleterious elements or other non-grade variables of economic significance (e.g. sulphur for acid mine drainage characterisation). ·     In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed. ·     Any assumptions behind modelling of selective mining units. ·     Any assumptions about correlation between variables. ·     Description of how the geological interpretation was used to control the resource estimates. ·     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 dta if available.	·     The 2021 Mineral Resource update, was made internally, by Chaarat geological department, and it was completed at March. 2022 ·     The 2021 Mineral resource update is using only drill hole data for the Resource interpolation, although assays from surface workings are used only in the interpretation process. ·     Micromine Software (under the license of Chaarat) was used for the block modelling ·     The Mineral Resource was estimated into block model, using ordinary kriging for Au, Ag is also estimated via IDW2 although it was not reported. IDW2 was used for density and recovery interpolation as well ·     Block model with parent block size of 5*5*5 m was generated within the wireframe domains, with 1m minimum sub-selling applied ·     Grade estimates was done by 1.5m composite sampling ·     Log probability plots and coefficient of variation were analysed for each domain for top cuts determination, including Au, Ag and Density ·     Two different variogram models were applied for low and high-grade domains ·     Block model was checked visually by sections, and geostatistical, using Q-Q and swath plots ·     The grade distribution in the block model is sufficiently matching the assay results ·     No estimation of deleterious elements was made ·     The Reported results are giving reasonable prospects for eventual economic extraction, taking in to account the estimated gold recovery ·     The updated at 2021 constrained Mineral Resource is: Density (g/cm 3 ) Mt Au (g/t) Au (koz) Class 2.66 25.11 0.98 789 Indicated 2.56 11.226 0.62 222 Inferred
Moisture	·     Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.	·     All Mineral Resource is estimated and reported on a dry basis
Cut-off parameters	·     The basis of the adopted cut-off grade(s) or quality parameters applied.	·     Mineral Resources have been reported at cut-off grade of 0.21 ppm Au ·     Cut-off grade determined using appropriate economic and technical parameters for open pit mining operations and heap leach gold extraction
Mining factors or assumptions	·     Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always 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.	The applied open pit optimisation parameters are including: c Item Unit  Resource_update_2021 Open pit optimization Econ. Initial Capital Cost $'000 99016.42 Selling Cost $/oz 9.89 Royalty % 18 Discount Rate % 5 Metal Price Au $/oz 1800 Ag $/oz 21.7 OP. Costs Mining $/t mined 1.89 Extra Ore Mining /Haulage $/t ore 0.84 Processing $/t ore 4.25 Stacking $/t ore 0.54 Owner's Mining Cost $/t ore 0.34 G/A $/t ore 1.27 Other Par. Recovery Au % Variable by block Refining Recovery-Au % 99.8 Refining Recovery-Ag % 60 Internal Cut-off g/t 0.21 Pit Slopes Variable by location Op. Limits Mining t/year 27000000 Processing t/year 5000000
Metallurgical factors or assumptions	·     The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral 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.	·     Recovery model, based on the stage of oxidation, was prepared in attempt to adjust the designing of the reported Resource shell. An unoxidized cluster, containing refractory gold mineralization, with low recovery was outlined beneath the Main Pit area, and accordingly excluded in the process of pit optimization. The average recovery in the constrained Resource, estimated per zones is 72-76 % Recovery_Au (%) Class Zone 71.91 Indicated Main_Pit 75.97 Indicated East_zone 75.01 Indicated Mid_zone 74.47 Inferred Main_Pit 75.49 Inferred East_one 76.14 Inferred Mid_zone
Environmental factors or assumptions	·     Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.	·     There are not considered to be any environmental factors likely to affect the assumption that the deposit has reasonable prospects for eventual economic extraction
Bulk density	·     Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples. ·     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.	·     Dry bulk density is measured using paraffin -coated immersion (Archimedes) method to evaluate the specific gravity (SG) ·     Density (SG) values have been interpolated into the block model, using Inverse Distance Weighting (IDW) method ·     The density data are comprising total of 1,623 dry specimens, measured by Chaarat ·     In 2020 no density measurements were done, as RC drilling is not providing proper material
Classification	·     The basis for the classification of the Mineral Resources into varying confidence categories. ·     Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data). ·     Whether the result appropriately reflects the Competent Person's view of the deposit.	·     Classification of Mineral Resources is based upon a review of geological continuity, quality of supporting data, spatial grade continuity and quality of a block model ·     Mineral Resource Classification was made manually, from section to section ·     Following criteria has been t aken in account during the Resource Classification: -The model has been classified only into two categories of Indicated and Inferred, as it is considered that the available data is not sufficient for Measured category -Drill hole spacing in plan: for Indicated was used average 30-40m drilling grid, for Inferred 40-80m -Total depth of mineral Resource classification: Inferred was restricted up to 80m from the last hole, for Indicated the restriction is 40-60m  ·     The results of the validation of the block model shows acceptable correlation in the input data to the estimated grades ·     The Competent Person is confident that all relevant factors have been considered and the results reflects these views.
Audits or reviews	·     The results of any audits or reviews of Mineral Resource estimates.	·     No external reviews have been made for 2021 Mineral Resource Update
Discussion of relative accuracy/ confidence	·     Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the 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.	·     The Mineral Resource is appropriate for the Tulkubash style of mineralization, and it is adequate to the available data. It is considered that the current drill hole spacing is sufficient to demonstrate geological continuity of the mineralization ·     Accuracy of the Mineral Resource is sufficient to permit economic development of the deposit ·     The Mineral Resource relates to global estimate ·     The application of top cuts and compositing in the Mineral Resource are considering as appropriate ·     The Mineral Resource estimation methodology is deemed appropriate, based upon validation of the model, using visual, statistical and graphical checks. Any alternative methods are likely to yield only minor changes to global Mineral Resource ·     The mineralization domains have been adhered to geostatistical and grade estimation works, and the spatial distribution of grade in the Mineral Resource model is representative of the sample data

Section 4 - Estimation and Reporting of Ore Reserves

Mineral Resource estimate for conversion to Ore Reserves	·     Description of the Mineral Resource estimate used as a basis for the conversion to Ore Reserves ·     Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves	·     Tulkubash April 2022, resource based on all DDH data inclusive of the 2021 exploration program. ·     Grades estimated with Ordinary Kriging into ore zones defined by wireframe modelling ·     Total M&I; 25.2 Mt @ 0.98 g/t Au containing 798 Koz ·     Inferred 11.2 Mt @ 0.62 g/t Au containing 222 Koz ·     Resource defined by 0.21 g/t Au cutoff within an $1,800/oz pit shell ·     Mineral Resource is inclusive of the Ore Reserve
Site Visits	·     Comment on any site visit undertaken by the Competent Person and the outcome of those visits	·     Peter C. Carter is qualified as a CP under JORC code (2012) ·     As a previous member of Chaarat staff, Mr. Carter has visited the site on numerous occasions in 2018 and 2019 ·     There have been no material changes to the project site with respect to Ore Reserves since Mr. Carter's last site visit
Study Status	·     The type and level of study undertaken to enable the Mineral Resource to be converted to Ore Reserves ·     The code requires that a study, at least to Pre-feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves.  Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.	·     The basis for the conversion of the Mineral Resource to an Ore Reserve is the 2021 Updated Feasibility Study completed by LogiProc PLC and Sound Mining Inc of Johannesburg, RSA. ·     The study represents a Class 3 estimate of the project value with an accuracy of -10% to +15%. ·     The study determined the project to be both technically and economically viable. ·     Modifying Factors have been considered in the conversion of the Mineral Resource to an Ore Reserve ·     Some technical parameters have changed since completion of the FS and have been updated
Cutoff Grade	·     Nature of cutoff grade	·     A cutoff grade for recovered Au was employed due to the variable recovery in the geo-metallurgical model ·     The cutoff grade parameters are based on those from the 2021 FS updated ·     Recovered Au cutoff = 0.16 g/t Au ·     True marginal cutoff = 0.22 g/t Au at 74% recovery
	·     Parameters used to calculate cutoff grade	·     Owner's Mining = 0.34 $/t ore ·     Ore Haul = 0.72 $/t ore ·     Process = 4.79 $/t ore ·     G&A = 1.25 $/t ore ·     Refining = 9.78 $/oz ·     Gold Price = 1,600 $/oz Au ·     Royalty = 14%
Mining Factors or Assumptions	·     The methods and assumptions used as reported in the PFS or FS to convert the Mineral Resource to an Ore Reserve.	·     Mineral Resource model used a parent block size of 5 m x 5 m x 5 m which respects the selective mining unit ·     Pit optimization conducted with Whittle 4X ·     Mining costs were $2.55/t ore and $1.83/t waste ·     Other parameters as per cutoff grade calculation and recommended pit slopes ·     Shells optimised for $1,000-$1800/oz Au ·     $1,350/oz shell selected as basis for pit design ·     Manual design process using GEMS software used to generate minable pit design ·     Ore Reserve inside manual design within 5% of the minable resource within optimised shell
	·     Use of Inferred Mineral Resources	·     Inferred Mineral Resources were not permitted to influence the pit optimization and were treated as waste during mine design and reserve calculation
	·     Dilution and Mining Recovery	·     0.5 m "dilution skin" modeled around ore ·     Average dilution 10.1% at 0.14 g/t Au ·     Dilution grade high due to presence of Inferred Resources adjacent to ore zones ·     Mining losses estimated at 2.5% resulting in 97.5% ore recovery
	·     Geotechnical	·     Pit slopes based on slope design study by WAI in 2017 ·     IRAs of 51o and 58o ·     Overall slopes of 40-50o ·     5 m benches; 8 m berms; 20 m highwalls ·     Design criteria extrapolated to Mid and East Zone as those areas host only 12% of the reserve
	·     Adjusted Reserve	·     23.1 Mt ore grading 0.87 g/t Au containing 647 Koz Au ·     66.4 Mt associated waste ·     2.9:1 strip ratio ·     89.5 Mt total material
	·     Open Pit Description	·     7 pits arranged along 4 km of strike ·     Main Zone (MZ) Pit; 1 large pit; contains 88% of the reserve by contained metal ·     Mid & East Zone; 6 small pits; 12% of reserve
Mining Plan	·     Mining Approach	·     Contract mining ·     Contracting reduces capital costs and training burden ·     Contractor experienced in western-style open pit gold mining ·     Contractor has similar culture and language as local workforce
	·     Mining Method	·     Conventional drill-blast, truck-shovel open pit mining method ·     Small equipment able to provide production capacity, selectivity, and flexibility in restricted working areas
	·     Mine Production Plan	·     6 years of mining including 1.1 years of pre-stripping ·     350 days of operation per year ·     Average mining rate, 43,000 tpd over LOM ·     Peak mining rate, 53,000 tpd 2025-2027 ·     Average strip ratio during operating period, 2.6:1
	·     Ore Control	·     Blasthole cuttings tested for g/t Au, % Total Sulfur, CN solubility ·     Geologists log cuttings for degree of oxidation ·     Ore and waste blocks flagged by surveyors for excavation
	·     Mine Water Management	·     Groundwater inflows of 30 m3/hr anticipated ·     Inflows to be collected in sumps and pumped to a holding pond ·     Runoff will be diverted around the open pits by ditches ·     Collected water used for dust suppression or treated and released
	·     Slope Stability	·     Pre-shear and buffer blasting to protect pit walls ·     Walls to be cleaned with by excavators with hydraulic hammers ·     Visual inspections and survey employed to monitor movement ·     Mapping of structural features to optimize design safety
	·     Mining Equipment	·     5 x 5 m3 excavator + 1 x 5 m3 FEL ·     6 x crawler-type, 115 mm, blasthole drills ·     Max 70 x highway-type, 35t haul trucks ·     40-50 t bulldozers and 200 HP graders in support
Mine Infrastructure	·     Dumps & Stockpiles	·     Main waste dump < 1 km from MZ Pit with 70 M m3, (100 Mt) capacity ·     8 Mt of waste used to backfill pits 2027-28 ·     Ore SP 600 kt capacity located near Sandalash River bridge ·     All stockpiled ore processed by end of LOM
	·     Mine Roads	·     Dual access to MZ Pit ·     6.5 Km Ore Haul Road from Sandalash River bridge to ROM Pad ·     All haul roads 15 m wide for 2-way traffic; maximum grade 10%
	·     Mine Facilities	·     Maintenance Workshop ·     Magazine ·     AN Storage ·     Fuel Farm ·     Offices & communications
Metallurgical Factors or assumptions	·     Proposed metallurgical process and flowsheet	·     Heap leach (HL) processing selected ·     3-stage crushing of ore to P100 12 mm ·     Crushed ore stacked by trucks in 7 m lifts on valley-fill leach pad ·     Au adsorbed onto activated carbon from PLS in CIC circuit ·     Loaded carbon stripped in AARL-type elution circuit ·     Electrowinning and smelting on site produce dore for shipment
	·     Appropriateness of process to the style of mineralization	·     About 70% of the Au is readily CN soluble ·     Host rock fractures easily to produce 12 mm crush ·     No agglomeration at crush sizes > 6 mm ·     Lowest capital and operating costs for treating low grade, oxidized ore
	·     Is the metallurgical process well-tested or novel in nature?	·     Process is robust and widely used ·     Practical for cold-weather conditions ·     Heap leaching proven globally over last 40 years
	·     Nature of metallurgical test work	·     Process scoping test work conducted by Mintek, SGS, RDI, BGRIMM, and Hazen ·     HL test programs by WAI (2017), MLI (2018), SAEL (2019 & 2021) ·     HL testing included bottle roll (BR), column leach (CL), load-permeability, and agglomeration test work
	·     Amount and representativeness of metallurgical test work	·     93 composite samples tested in all three programs ·     78 BR and 11 CL tests produced results representing potential leach feed ·     75% of samples from Main Zone, 25% from Mid Zone and potential East Zone ·     Results indicate BR good proxy HL recovery
	·     Nature of metallurgical domaining	·     Sulphide and oxide domains defined ·     Three oxidation states established ·     BR results matched to each ox state ·     IDW2 used to estimate recovery for individual blocks in oxide domain
	·     Metallurgical recovery factors applied	·     Recoveries derived from geo-metallurgical model ·     Overall recovery for the Ore Reserve 74% ·     Average recovery in Main Zone 73.8%, Mid Zone 75.9%, and 76.4% East Zone
	·     Assumptions or allowances for deleterious elements	·     Ore is associated with arsenic and antimony ·     Neither element is present in amounts which affect the selected process or create environmental issues
	·     Existence of bulk sample or pilot scale test work and the degree to which such samples are considered representative	·     No bulk samples or pilot scale test work has been conducted ·     The samples tested are representative of the variability of leach feed across the entire known deposit
	·     For minerals that are defined by specification, has the ore reserve estimate been based on the appropriate mineralogy to meet the specification?	·     The Ore Reserve is not defined by a specification
Environmental	·     The status of studies of potential environmental impacts of the mining and processing operations.	·     ESIA completed by WAI in 2018, updated in 2020 ·     Kyrgyz EIA (OVOS) completed in 2015 ·     OVOS being updated in support of project permitting
	·     Details of waste rock characterization	·     NAG testing in 2020 on 110 samples distributed throughout deposit ·     Average NAG pH 5-6 indicating little or no acid generating potential ·     ABA testing indicates 6% of samples PAG
	·     Consideration of potential sites and status of design options considered	·     Project site terrain is extremely rugged and constrained ·     Only location able to accommodate the heap leach pad and process facility was the selected Dry Valley site ·     Dry Valley enables a valley-fill leach pad design suited for cold weather operation ·     Detailed engineering is in progress
	·     Status of approvals for process residue storage and waste dumps	·     Dry Valley location for the heap leach pad is approved ·     MZ waste dump in the Irisai Valley is approved ·     Permitting process for various aspects of the process facility is ongoing
Infrastructure	·     Existence of appropriate infrastructure	·     New site access road completed ·     Exploration/Pioneer camps established ·     Permanent camp under construction ·     All other infrastructure to be provided during construction
	·     Availability of land for development	·     Chaarat has been granted surface rights for the land required to develop the project
	·     Power	·     A 4.5 MW diesel-fired power plant will supply the site with electricity
	·     Water	·     Process water and raw water will be sourced from boreholes located near the plant and camp respectively ·     Raw water at the camp and ADR plant will be treated to generate potable water
	·     Transportation	·     All personnel, goods, and materials will be transported to and from site via road ·     Bulk materials and equipment will arrive by rail in Bishkek, 750 km from site, finishing the journey by truck
	·     Labor	·     The project workforce is estimated at 720 ·     On a 15-15 continuous shift schedule, half the workforce will be on site at any given time ·     80% of the workforce is expected to be national with a target of 30% coming from local villages
	·     Accommodation	·     The workforce will be housed on site in a 360-man permanent camp
	·     Ease with which infrastructure can be provided	·     All infrastructure will be installed during the 28-month construction period
Costs	·     Derivation and assumptions regarding capital costs	·     Capital costs from 2021 FS ·     LOM CAPEX estimated at $131 M ·     Initial capital approximately $116 M ·     Deferred and Closure costs = $15 M ·     Contingency was applied at 10% ·     AACE Class 3 estimate, -10% to +15%
	·     Methodology used to estimate operating costs	·     Mining cost from quote by the Contractor based on the detailed mine plan ·     Process, Owner Mining, and G&A were developed from first principles based on detailed operating plans ·     All other are based on the 2021 FS Update
	·     Allowances made for deleterious elements	·     Project does not incur any added cost due to deleterious elements
	·     Source of exchange rates used in the study	·     Exchange rates for Rubles, Som, and Euros to USD were as per prevailing rates in H1 2021
	·     Derivation of transportation charges	·     Transportation costs were included in the price of all goods and materials ·     Cost of shipping was based on estimates a specialist logistics service provider in the region
	·     Basis for forecasting refining charges	·     Refining charges were based on advice from the Kyrgyz gold refinery at Kara-Balta
	·     Allowances for royalties, both government and private	·     Kyrgyzstan has a sliding scale royalty system pegged to gold price ·     At a gold price of $1,600/oz Au the royalty payable is 14% ·     No private royalty payable on the project ·     Royalties are applied in lieu of corporate tax in Kyrgyzstan
Revenue Factors	·     Head grade and recovery	·     Average head grade 0.87 g/t Au from the block model, adjusted for dilution ·     Average Au recovery 74% from geo-metallurgical model
	·     Metal price	·     Commodity broker consensus forecast Feb 2022, $1,618/oz over production period ·     Gold price used $1,600/oz Au ·     By-product silver priced at $20.00/oz Ag
	·     Exchange rates	·     Payment made in USD, foreign exchange not applicable to revenue
	·     Transportation and treatment charges	·     Refining and transport costs from Kyrgyz national gold refinery at Kara-Balta and a bonded carrier respectively
	·     Refining penalties	·     No penalties payable on Tulkubash dore
	·     Net Smelter Returns	·     Dore, 45% Au and 55% Ag, payable 99.5% and 85% respectively
Market Assessment	·     The demand, supply, and stock situation for the commodity, consumption trends and factors likely to affect supply and demand in the future	·     All producers of precious metals in Kyrgyzstan are obliged to offer their output for sale to the National Bank of the Kyrgyz Republic at world spot prices ·     If NBKR declines to purchase metals offered, the producer is free to directly sell on world markets
	·     A customer/competitor analysis along with identification of likely market windows for the product	·     Not applicable
	·     Price and volume forecasts and the basis of these forecasts	·     The forecast gold price averages $1,600/oz over LOM ·     Average annual production forecast to be 106 Koz Au during 3 years of full operation
	·     For industrial minerals, the customer specification, testing, and acceptance requirements prior to a supply contract	·     Not applicable
Economic	·     Production Plan	·     Operations will mine 23.1 Mt ore grading 0.87 g/t Au and 66.4 Mt associated waste over 6-year period ·     Project will recover 479 Koz primary Au and 386 Koz by-product Ag over a 5-year LOM
	·     Capital Costs	·     2021 FS LOM capital of $131 M
	·     Operating Costs	·     Mining, Contract = $2.15/t mined ·     Mining, Owner = $0.34/t ore ·     Process = $4.80/t ore ·     G&A = $1.27/t ore ·     Unit costs for production period only
	·     Financial Considerations	·     Royalty applied at 14% in lieu of tax ·     Base Case discount rate = 5% ·     Project value calculated from July 1, 2022 ·     Model is unleveraged, assumes 100% equity
	·     Cost Exclusions	·     Inflation ·     Engineering ·     Permitting ·     Exploration ·     Interest and financing charges
	·     Economic Performance	·     After-tax NPV discounted at 5% = $138 M ·     After-tax IRR = 33% ·     Simple Payback = 2.3 years
	·     Comparison to 2019 FS	·     19% increase in NPV at $1,450/oz Au ·     62% increase in NPV at $1,600/oz Au
	·     Sensitivity Analysis	·     Project NPV declines to $92 M 10% ·     Each 1% change in CAPEX = $1.1 M change in NPV ·     Each 1% change in OPEX = $2.5 M change in NPV ·     Each 1% change in gold price result in $3-$4 M change in NPV ·     Project is breakeven is at a gold price of about $1,090/oz Au
Social	·     Status of agreements with key stakeholders and matters leading to social license to operate	·     Chaarat has a standing agreement to fund annual "social package" for Chatkal as per Kyrgyz legislation ·     Chaarat has committed to hiring quotas from local villages ·     Chaarat has promoted the development of local business, education, and social events ·     Chaarat maintains a program of engagement with the local government and population
Other	·     Naturally Occurring Risks	·     The project is subject to risks from geohazards, seismicity, and extreme weather ·     The project design has been developed to mitigate, control, or manage these risks
	·     Legal Agreements	·     Chaarat has partnered with its Mining Contractor, Ciftay Insaat ·     Ciftay has taken a 12% stake in the project worth $31 M ·     Ciftay will perform construction earthworks, mining, ore stacking, and operate the Permanent Camp under a variety of separate contracts
	·     Permitting	·     Chaarat holds a mining license for the operating area, 700 ha, and an exploration license for the surrounding 6,770 ha ·     Surface rights have been secured for all land required to develop the project ·     A permitting process is in place to acquire all permits and approvals required for construction and operation
Ore Reserve Classification	·     Basis for classifying the ore reserve into various confidence categories	·     Drillhole data density ·     Search for Probable reserves 40 m ·     Grade/thickness variability ·     Continuity along strike
	·     Do the results reflect the CP's view of the deposit?	·     Yes.  The absence of Measured Resources precludes declaring Proven Reserves ·     The Probable Reserves are based on accepted standards for similar deposits and appropriately reflect the quality of the geologic, technical, and economic factors used to define them
	·     What proportion of Probable Ore Reserves have been derived from Measured Mineral Resources?	·     None, there are no Measured Resources
Audits or Reviews	·     Results of any audits or reviews of the Ore Reserve estimate	·     No third-party audits or reviews have been completed on the updated Ore Reserve
Discussion of relative accuracy /confidence	·     Qualitative discussion of the factors that would affect the accuracy and confidence of the estimate ·     State whether the accuracy/confidence refers to the global or a local Ore Reserve estimate	·     Mineral Resource Estimate based on an additional 2,760 m of drilling ·     Variography and sample selection criteria reviewed ·     Wireframe and sulfide contact interpretation reviewed and updated ·     Previous MRE reviewed by external parties with no fatal flaws found ·     Accuracy and confidence refer to the global Ore Reserve estimate ·     Project design is flexible enough to accommodate local variations in presentation of tonnage and grade
	·     Modifying Factors which may affect the accuracy/confidence of the Ore Reserve estimate	·     The mining plan employs a conventional approach with achievable mining rates ·     Some geotechnical and hydrogeological factors need further definition, however, this will not affect the accuracy of the Ore Reserve estimate ·     Process technology is proven ·     Recovery estimate reflects test work ·     CAPEX and OPEX estimates are FS-level; review required to confirm current validity ·     The project can manage variations in metal and commodity prices of 10-20% ·     The project is subject to political and regulatory risks typical for a developing country ·     Natural risks such as geohazards and seismicity have been considered in the project design

 

 

END

 

 

UPDKZGZKGFGGZZZ