Updated resource statement

RNS Number : 6472W

Chaarat Gold Holdings Ltd

11 November 2014

 

Chaarat Gold Holdings Limited

("Chaarat" or "the Company")

Updated resource statement for the Chaarat Gold Project

Road Town, Tortola, British Virgin Islands ( 11^th November 2014).

Chaarat (AIM:CGH), the AIM quoted gold exploration and development company with assets in the Kyrgyz Republic, is pleased to provide an updated resource statement for the Chaarat Gold Project.

Highlights:

·     Total JORC compliant resource increased 15.43% from 5.29 million ounces to 6.1 million ounces at a grade of 3.20 g/t Au*

·     Measured and Indicated portions of the total resource have increased 33.08% from 3.90 million ounces to 5.19 million ounces

·     Resource of the Tulkubash Zone which will underpin the first stage heap leach project  calculated to be 13.24 million tonnes at a grade of 1.71 g/t Au to give a total content of
729 koz 

·     Better understanding of the grade distribution in the refractory segment of the Chaarat Deposit in the Main and Contact Zones shows high grade core and lower grade envelope

·     The high grade core forms 85.86% of the Main and Contact Zone resource at 4.61 million ounces with a grade of 3.83 g/t Au and will enable the Chaarat Project to generate attractive returns even in a low gold price environment

*using a cut-off grade of 1.0 g/t for the oxide resource (Tulkubash zone) and 2.0 g/t for the refractory material (Main and Contact Zones).

During the 2014 season, we undertook about 6,500 metres of diamond core drilling  to better substantiate the resource of the standalone open pittable heap leachable Tulkubash Project. We also wished to identify and demonstrate additional strike to the north which would underpin the possible increase of the future life of mine. 

GeoSystems International, Inc was engaged to develop a structural model of the Chaarat deposit to support a statistical assessment of the estimated contained resource. Mr Mario Rossi, a geo-statistician and principal of the company, has significant experience, most relevantly for Chaarat, at the Jinfeng gold mine in China which has many similarities to the ore composition of the Chaarat Project.

The results of Mr Rossi's work have confirmed the unique characteristics of the two principal systems within the Chaarat deposit:

1.    The Tulkubash system consists of a multitude of relatively thin veins hosted in quartzite from which gold can be recovered by direct leaching due to the low sulphur content of the ore.  It is anticipated that the results of the Definitive Feasibility Study ("DFS") will confirm that the low cost of processing by the heap leach method will enable us to reduce the Cut-off Grade ("COG") for this section of the deposit from 1g/t to 0.5g/t and thereby significantly increase the economically recoverable resource.  

2.    The mineralisation of the Contact Zone and the Main Zone is refractory ore which means a stage of oxidation is required before gold can be extracted by leaching.  It has now been established that the mineralisation consistently demonstrates a higher grade core and lower grade halo with most of the gold residing in the higher grade core.

Mr Rossi developed a resource model to estimate the high grade core of the refractory ore zones and the medium to low grade halo around them. The estimation of the lower grade halo around the higher grade cores adds significant ounces and can be used to estimate dilution when selecting the relevant mining method for this part of the deposit. The higher grade core contains 4.61 million ounces of gold at a grade of 3.83 g/t, a grade which will enable Chaarat to continue to generate returns from the deposit even in much lower gold price environments.

Dekel Golan CEO comments: "Our team, working with Mario Rossi, summarised the data generated from more than 10 years of exploration, more than 100,000 metres of drilling and more than 2 kilometres of adits and drives into a robust model underpinning one of the best undeveloped deposits in the world. It is a difficult time for our industry. The cost of finding gold is on the rise whilst the grade of the discoveries has dropped precipitously.

A large heap leachable project with a grade of over 1.7 g/t of gold as well as silver credits, which requires a relatively low upfront investment, is a very good way to start production. As I have previously pointed out 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.

As for the more difficult to process ore, often called refractory, it seems that a significant portion of the ore can be mined by an open pit method. The anticipated slightly higher cost of processing and treatment of refractory ore will be offset by the increased gold content and excellent anticipated recoveries. 

We are focusing on the development effort now by completing the feasibility study and securing finance for the construction of the project. It is perhaps the right time to thank our dedicated exploration team for their relentless and eventually successful work."

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

Competent Person

Mario Rossi is a Competent Person as defined by JORC and AIM and has reviewed and approved the relevant technical information relating to the resource estimates in this release. Mr Rossi (Fellow AusIMM, Member CIM, Member SME) is Principal Geostatistician of GeoSystems International, Inc. and has more than 25 years' experience in mining and environmental geostatistics, mineral resource and reserves estimation, audits, and reviews, and continued simulation studies of different scales and purposes.   He has worked in over 100 different mining projects at various stages of development and operations around the world.

Enquiries:  

Chaarat Gold Holdings Limited	+ 44 23 800 11747
c/o Central Asia Services Limited	[e-mail]
Dekel Golan   CEO
Linda Naylor  FD
Numis Securities Limited	[phone]
John Prior, Paul Gillam (NOMAD) James Black (Broker)

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 - the Chaarat Gold Project. The Company's key objective is to become a low cost gold producer generating significant production from the development of the Chaarat Gold Project. Chaarat is preparing a Definitive Feasibility Study (DFS) and continuing its active community engagement programme to optimise the value of the Chaarat investment proposition. 

Chaarat aims to create value for its shareholders, employees and communities from its high quality gold and mineral deposits in the Kyrgyz Republic by building relationships based on trust and operating to the best environmental, social and employment standards.

Summary of Estimated Resources October 2014

	COG g/t Au	Tonnes (kt)	Au grade (g/t)	Content (koz)
Measured
Tulkubash	1.0	7,646	1.90	466
Main and Contact	2.0	6,629	3.15	671
Indicated
Tulkubash	1.0	3,224	1.77	184
Main and Contact	2.0	32,794	3.67	3,864
Measured & Indicated		50,293	3.21	5,185
Tulkubash	1.0	2,384	1.81	79
Main and Contact	2.0	6,611	3.92	832
Inferred		8,995	3.15	911
Total		59,288	3.20	6,096

Tulkubash COG 1.0 g/t Au	Tonnes (kt)	Au grade (g/t)	Content (koz)
Measured	7,646	1.89	466
Indicated	3,224	1.77	184
Measured & Indicated	10,870	1.86	650
Inferred	2,384	1.81	79
Total	13,254	1.71	729

Main and Contact Zones COG 2.0 g/t Au	Tonnes (kt)	Au grade (g/t)	Content (koz)
Measured	6,629	3.15	671
Indicated	32,794	3.67	3,864
Measured & Indicated	39,423	3.58	4,535
Inferred	6,611	3.92	832
Total	46,034	3.63	5,367

Analysis of the high grade core and lower grade halo within the Main and Contact Zones is presented in the following tables:

Higher Grade core COG 2.0g/t	Tonnes	Au grade	Au ounces (koz)
Measured	2,671	3.43	295
Indicated	28,663	3.82	3,524
Measured & Indicated	31,334	3.79	3,819
Inferred	6,082	4.04	789
Total	37,416	3.83	4,608

Lower Grade halo COG 2.0 g/t	Tonnes	Au grade	Au ounces (koz)
Measured	3,957	2.96	376
Indicated	4,132	2.56	340
Measured & Indicated	8,089	2.75	716
Inferred	529	2.53	43
Total	8,618	2.74	759

The tables for the Main and Contact Zones summarise the results from M24, M30, M34, M39, M44, M50, M60, Contact Project and C40 zones as described in previous resource updates.

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.

Glossary of Technical Terms "Ag" "Au" chemical symbol for silver 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
"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)

 

END

 

 

MSCBLBDBUUBBGSG