Updated resource calculation

RNS Number : 6602D

Chaarat Gold Holdings Ltd

01 April 2014

 

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Updated resource calculation for the Chaarat Gold Project

Road Town, Tortola, British Virgin Islands (1^st April 2014)

Highlights

·    Total Measured and Indicated JORC resource increased by 20% to 3.59 million ounces at a grade of 3.3 g/t (@ 2g/t cut off)

·    Measured and Indicated resource of the mostly oxide open pittable Tulkubash Zone increased 95% to 639,171 ounces @ 2g/t (@ 1g/t cut off)

·    Total resource (Measured, Indicated and Inferred) decreased by 8.1% from 5.76 Moz to 5.29 Moz due to more restrictive delineation of Inferred category resource*

Chaarat undertook an infill drilling programme in the 2013 season in order to increase the potential reserves to be delineated as part of the Definitive Feasibility Study (DFS).

Drilling in the shallower, more weathered and therefore more oxidized layer of the deposit was designed to increase the Measured and Indicated resource which will be mined by the open pit method. More material was delineated in the near surface oxide open pittable sections but at a slightly lower grade than the deeper material. The grade of the predominantly underground non-oxide material section of the deposit has been reduced from 4.03 g/t to 3.36 g/t using a 2 g/t cut-off grade. The grade of the shallow oxide and open pittable section of the deposit is currently 1.97 g/t using 1 g/t cut off. The change of grade was also a result of the more conservative approach adopted in the construction of the solid model.

As a result of the additional drilling a larger part of the resource can be categorised as Measured and Indicated. At the same time stricter criteria for inclusion of material in the Inferred category reduced the proportion of Inferred resource from 48% to 27% of the total resource.

It has become apparent that different mining methods will be used to mine the resource so presenting the resource at a single cut-off grade could be misleading. In accordance with current best practice the resource information has therefore been presented at a range of cut off grades.

Chaarat and its advisers believe that it would be prudent to use a cut-off grade of 2.0 g/t for areas of the deposit amenable to bulk underground mining techniques, based on a gold price of $1,250, and industry average bulk underground mining and mill processing costs. 

A cut-off grade of 1 g/t for the open-pit, oxide portions of the deposit, due to lower average mining and processing costs, is considered reasonable. 

Portions of the deposit where lower productivity underground mining techniques would be used are likely to have higher cut-off grades.  A more complete analysis of cut-off grades, costs and recoveries will be undertaken as part of the DFS. The resource model is the basis for the mine design which is currently being prepared by Gustavson.

Dekel Golan CEO of Chaarat commented: "Increasing the Measured & Indicated resource, which is the basis for the mine reserve calculation, by 20% to almost 3.6 million ounces is an outstanding achievement for our team. We are encouraged that the significant amount of oxide material now delineated may reduce costs of initial production. 

It is worth noting that the average grade of large discoveries today is 0.89g/t and the average grade of producing mines is 1.18g/t, significantly lower than that of Chaarat¹. This is perhaps the key strength of Chaarat - the potential, once in production, to continue to operate profitably even at a low gold price."

[1] Source: Natural Resource Holdings Global 2013 Gold Mines & Deposit Rankings - Visual Capitalist

* Based on the considerations above, Chaarat has previously reported its resource using a cut-off grade of 1.0 g/t for the predominantly open pit oxide resource and 2.0 g/t for the mainly underground sulphide material.
For the sake of clarity we have continued to use the same parameters.

Competent Person

The Competent Person with overall responsibility for this press release, and who has reviewed the information contained herein, is Thomas Matthews, MMSA QP, B.S., Geology, who is the Senior Resource Geologist of Gustavson Associates. He has 19 years of experience in the resource industry and is a Qualified Person as defined by NI 43-101, and a Competent Person as defined by JORC and AIM.  Mr Matthews 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 + 44 23 800 11747/+ 44 20 7499 2612 c/o Central Asia Services Limited [e-mail] Dekel Golan   CEO Linda Naylor  FD Numis Securities Limited [phone] John Prior, Stuart Skinner (NOMAD) James Black (Broker) Further information is available at www.chaarat.com NOTES TO EDITORS: About Chaarat Gold

Chaarat Gold is an exploration and development company operating in the Kyrgyz Republic with a large, high grade resource which is capable of generating low cost gold production - the Chaarat Gold Project.

The Company's key objective is to become a low cost gold producer targeting annual production of 200,000 ounces from the development of the Chaarat Gold Project. Chaarat is fully funded to complete a Definitive Feasibility Study (DFS) and continue its active community engagement programme to optimise the value of the Chaarat investment proposition.

Chaarat has several other promising prospects also located within the Kyrgyz Republic.

Summary of Estimated Resources March 2014

Table 1: Chaarat Deposit Resources by Zone

		Measured & Indicated			Inferred			Total - Measured & Indicated and Inferred
	Cut-off	Tonnes	Grade	Content	Tonnes	Grade	Content	Tonnes	Grade	Content
	g/t Au	(millions)	g/t Au	koz Au	(millions)	g/t Au	koz Au	(millions)	g/t Au	koz Au
Tulkubash	1.0	10.0	1.98	639	1.9	1.90	116	11.9	1.97	755
Main & Contact	2.0	30.6	3.31	3,258	11.4	3.49	1,274	42.0	3.36	4,532
	Total	40.7	2.98	3,897	13.3	3.26	1,390	53.9	3.05	5,287

		Measured			Indicated			Total - Measured & Indicated
	Cut-off	Tonnes	Grade	Content	Tonnes	Grade	Content	Tonnes	Grade	Content
	g/t Au	(millions)	g/t Au	koz Au	(millions)	g/t Au	koz Au	(millions)	g/t Au	koz Au
Tulkubash	1.0	3.7	2.17	257	6.3	1.87	382	10.0	1.98	639
Main & Contact	2.0	3.2	3.89	401	27.4	3.24	2,857	30.6	3.31	3,258
	Total	6.9	2.97	658	33.8	2.98	3,239	40.7	2.98	3,897

Table 2:  Mineralized Material: Tulkubash Section (predominantly oxide and open pit)

Cut-off g/t Au	Measured & Indicated			Inferred			Total Measured & Indicated and Inferred
	Tonnes (Mt)	Grade (g/t)	Content (koz)	Tonnes (Mt)	Grade (g/t)	Content (koz)	Tonnes (Mt)	Grade (g/t)	Content (koz)
0.5*	21.4	1.31	901	4.44	1.21	173	25.8	1.29	1073
1.0	10.02	1.98	639	1.89	1.9	116	11.9	1.97	755
1.5	5.46	2.63	461	1.06	2.44	83	6.5	2.59	544
2.0	3.16	3.28	333	0.63	2.89	59	3.8	3.21	392
2.5	1.94	3.92	247	0.373	3.35	40	2.3	3.83	288

Cut-off g/t Au	Measured			Indicated			Total Measured & Indicated
	Tonnes (Mt)	Grade (g/t)	Content (koz)	Tonnes (Mt)	Grade (g/t)	Content (koz)	Tonnes (Mt)	Grade (g/t)	Content (koz)
0.5*	7.12	1.47	337	14.28	1.23	564	21.4	1.31	901
1.0	3.69	2.17	257	6.33	1.87	382	10.02	1.98	639
1.5	2.18	2.82	198	3.27	2.49	262	5.46	2.63	461
2.0	1.36	3.49	152	1.80	3.12	181	3.16	3.28	333
2.5	0.83	4.27	114	1.13	3.66	133	1.94	3.92	247

Table 3:  Mineralized Material:  Main and Contact Zones combined (predominantly sulphide and underground)**

Cut-off g/t Au	Measured& Indicated			Inferred			Total Measured & Indicated and Inferred
	Tonnes (Mt)	Grade (g/t)	Content (koz)	Tonnes (Mt)	Grade (g/t)	Content (koz)	Tonnes (Mt)	Grade (g/t)	Content (koz)
0.5*	116.87	1.657	6,306	50.99	1.59	2,609	167.86	1.65	8,915
1.0*	72.27	2.18	5,343	29.74	2.20	2,106	106.00	2.19	7,450
1.5*	48.12	2.73	4,230	17.99	2.84	1,642	66.11	2.76	5,872
2.0	30.64	3.30	3,258	11.36	3.49	1,274	41.99	3.357	4,532
2.5	19.85	3.89	2,484	7.29	4.20	984	27.13	3.976	3,468

Cut-off g/t Au	Measured			Indicated			Total Measured & Indicated
	Tonnes (Mt)	Grade (g/t)	Content (koz)	Tonnes (Mt)	Grade (g/t)	Content (koz)	Tonnes (Mt)	Grade (g/t)	Content (koz)
0.5*	10.14	1.99	649	106.72	1.65	5,657	116.87	1.657	6,306
1.0*	6.98	2.56	573	69.28	2.14	4,770	72.27	2.18	5,343
1.5*	4.61	3.23	479	43.51	2.68	3,751	48.12	2.73	4,230
2.0	3.20	3.89	401	27.43	3.24	2,857	30.64	3.30	3,258
2.5	2.31	4.52	337	17.52	3.81	2,147	19.85	3.89	2,484

* Portions of mineralization at these cut-off grades may not have reasonable prospects for economic extraction under mining and process cost assumptions for this zone, depending on oxidation zonation and mining method, but are included for the sake of completeness.

** Includes M2400, M3000, M34, M39, M44, M50, M60, Contact Project and C40 zones from previous resource statements.

Note:  Table 1 includes the information presented in Tables 2 and 3.

Quantity and grade are estimates and are rounded to reflect the fact that the resource estimate is an approximation.  Mineral resources are not ore reserves and do not have demonstrated economic viability.  There is no certainty that all or any part of the mineral resource will be converted to reserves.  Quantities may not add or multiply due to rounding.

Disclaimer This press release includes forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Chaarat's control that would cause the actual results, performance or achievements of Chaarat to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Chaarat's present and future business strategies and the environment in which Chaarat will operate in the future. Any forward-looking statements speak only as at the date of this document. Chaarat expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this document to reflect any change in Chaarat's expectations with regard to these or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, the events described in the forward-looking statements in this press release may not occur either partially or at all. .

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" "koz"	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 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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