Chaarat Gold Holdings Ltd : Resource Update

Chaarat Gold Holdings Limited
("Chaarat" or "the Company")

Increase in the Chaarat Gold Project Calculated Resource to 5.59 million ounces

Over 1 million ounces added in 2011 drilling campaign

Road Town, Tortola, British Virgin Islands (5 March 2012)

Chaarat (AIM-CGH), the gold exploration and development company operating in the Kyrgyz Republic, is pleased to announce a resource update based upon its 2011 drilling campaign at its Chaarat Gold Project.  

Highlights

• Updated estimate of the gold resource to 5.59 million ounces, an increase of 27% from the 4.406 million ounces announced on 7 February 2011 

• Tulkubash (including mostly free milling mineralisation) section of the resource increased by 56% to 501,000 ounces from 321,000 ounces  

• Sulphide (refractory) section of the resource increased by 25% to 5.09 million ounces 

During the 2011 exploration season 171 new core drill holes (29,094 metres) were drilled and subsequently incorporated into the Resource Database. The resource was estimated to JORC compliant standards by Wardell Armstrong International ("WAI"), an internationally recognised consulting company.

Drilling has been focused on three main "Projects", which Chaarat is developing into viable mining projects, in order to establish the foundation for a large scale low cost mining operation.

The Tulkubash Project

The oxide mineralisation hosted in the Tulkubash quartzite can be identified over a 6 km strike length. Drilling to date has focused on a small 500m section, where infill drilling has allowed the delineation of a mineable reserve (calculation to JORC compliant standards is in progress). The considerable on-strike extension potential, which is likely to facilitate a rapid increase in the production rate (as announced on 22 November and 7 December 2011), has been demonstrated by 440 metres of wide spaced drilling to the north of the deposit.  Drilling has been focused on the near surface part of the mineralisation which can be extracted by low strip ratio open pit mining, the oxide ore from which is expected to be mostly free milling. This resource has increased by 56% from 321,000 ounces to 501,000 ounces within the Measured, Indicated and Inferred categories. Due to the focus on the shallower, more weathered section of the deposit, the resource grade decreased to 2.93 g/t.

As reported on 7 December 2011, the Company continues to work on the documentation required for the application for the grant of a mining licence - it plans to start mining this summer.  Gold production is due to commence in 2013 once the processing plant has been commissioned.

The Contact Project

This Project, characterised by a wide and consistent vein system, currently hosts 2.78 million ounces (with 1.675 million ounces in the Indicated category), an increase of 39% over last year's resource update. This increase in resource was accompanied by a small improvement in grade to 4.32 g/t. The Contact Project is open both on strike (both towards south and north) as well as down dip. The width of the mineralisation and its grade improve with depth.

The Main Project

The Main Project, (which was formerly known as M2400 and M3000), is now recognised as a single large body of 1.51 million ounces (with 0.866 million ounces in the Indicated category), an increase of 17%, with the combined grade falling slightly to 4.14 g/t. Only 13 holes were drilled in the Main Project this year. However it is expected that the size of this Project will increase significantly and the grade will improve once underground drilling can take place following the development of an adit.

Additional bodies

Due to limited funding and the need to prioritise drilling in the areas outlined above, no drilling was carried out on a further six bodies comprising 794,000 ounces between them at a grade of 4.16 g/t.   These bodies are very promising and are adjacent to the Main and the Contact Projects.  

Dekel Golan CEO comments:

"2011 was another excellent year during which we added over a million ounces of gold to our resource. I believe that the tremendous potential of Chaarat is being demonstrated by successful, rigorous exploration activity and the development of the infrastructure needed to support a large-scale operation. The significantly improved political climate in the Kyrgyz Republic (a recent report from the Economist Intelligence Unit recently heralded the Kyrgyz Republic as the most democratic of the Central Asian republics) is giving a welcome added impetus to our operations during this development phase, whilst the Tulkubash Project, the non-refractory section of the deposit, is being fast tracked to development in order to stimulate early cash flow for the Company. These are exciting times for us at Chaarat."

Methodology

The Mineral Resources for the Main and Contact Zones at the Chaarat gold deposit in the Kyrgyz Republic were estimated by WAI in January 2012 using industry-standard geological modelling and Mineral Resource estimation software.

The revised estimation has used all available exploration data from previous (2004 to 2010) exploration campaigns, including assays from drill holes, bulldozer-cuts, trenches and underground.

The data was used to develop new, three-dimensional, geological wireframe models for each mineralised zone using a boundary definition cut-off grade of 2g/t Au for the Kiziltash Projects and 1 g/t Au cut-off for the Tulkubash Project. Once the 3-D geological solids were built, a two-dimensional estimation was undertaken for the mineralised zones.

WAI used ordinary kriging for the estimation of all sub-zones within the Main and Contact Zones using a block size of 20m by 20m by 10m.

All WAI estimates were validated by comparing the global mean statistics of the sample data with the estimates and a swath analysis exercise, which compared the composite data with the block estimates within a given swath, validating the quality of the local estimates.

WAI has taken into account the data distribution, grade variability, geological interpretations, structure of the variograms and the quality of the estimation in the classification of the Mineral Resource.

The recent infill drilling has demonstrated the depth and width continuity of the geological boundaries of the Main, Contact and Tulkubash Zones and has resulted in an increase in the volume of the mineralisation compared with the previous Resource estimates.

Competent Person

The Competent Person with overall responsibility for this press release, and who has reviewed the information contained herein, is Sunit Patel, M.Sc. (Geology), FGS, GSSA, who is an employee of Chaarat. Sunit is an exploration geologist with more than 23 years of experience in the resource industry who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and he was supervisor to the work which is the subject of this release.  Mr. Patel consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Enquiries:  

Chaarat Gold Holdings Limited	[phone]
c/o Central Asia Services Limited
Dekel Golan   CEO	[e-mail]
Linda Naylor  FD	[e-mail]
Numis Securities Limited	[phone]
Alastair Stratton, Stuart Skinner (NOMAD)
James Black (Broker)
Bankside Consultants	[phone]
Simon Rothschild	[e-mail]
Smith's Corporate Advisory	[phone]
Dominic Palmer- Tomkinson	[e-mail]

Table 1: Summary of Estimated Resources at Chaarat (February 2012)

	Measured* & Indicated			Inferred			Total
Project	Tonnage (kt)	Grade (g/t Au)	Content (koz)	Tonnage (kt)	Grade (g/t Au)	Content (koz)	Tonnage (kt)	Grade (g/t Au)	Content (koz)
TULKUBASH
Tulkubash Project	2,325	2.84	214	2,987	2.99	287	5,312	2.93	501
KIZILTASH
Contact Project	12,038	4.36	1,675	8,045	4.25	1,109	20,083	4.32	2,784
Main Project	6,236	4.20	866	4,889	4.07	645	11,125	4.14	1,511
ADDITIONAL BODIES
C4000	425	3.33	46	444	3.33	48	869	3.33	94
M3400	27	3.46	3	941	4.71	142	968	4.68	145
M3900	762	3.49	86	1,663	3.86	206	2,425	3.74	292
M4400				321	6.29	65	321	6.29	65
M5000				413	5.70	76	413	5.70	76
M6000	111	4.45	16	824	4.01	106	935	4.06	122
Total	1,325	3.52	151	4,606	4.34	643	5,931	4.16	794
Sulphide Section	19,599	4.26	2,692	17,540	4.22	2,397	37,139	4.24	5,089
GRAND TOTALS/ AVERAGES	21,924	4.11	2,906	20,527	4.04	2,684	42,451	4.08	5,590

*The Company's only measured resource is within the Tulkubash Project and comprises a tonnage of 180kt at a grade of 3.07 g/t Au and content of 18koz.

Quantity and Quality of Data

The Mineral Resource estimate has been compiled from all core drill holes completed on 10 project areas at Chaarat to date and supersedes the resource update announced on 7 February 2011 and the update on the Contact Project announced on 7 July 2011.

The 463 holes included in the Mineral Resource estimate were drilled on the three sub-parallel zones of mineralisation at Chaarat, the Main, the Contact and the Tulkubash Zones, which are characterised by mineralisation up to 37 metres wide and dipping at 55 to 70 degrees to the northwest.

The deepest drill intersection on the Contact Project is 552.40 metres. On the other nine project areas, included in the Mineral Resource estimate, drilling is limited to depths of between 82 to 434 metres.

On all project areas, the mineralisation remains open down dip, and on the majority, also open along strike. Surface drilling will focus on the Tulkubash Project to upgrade the category of resource in the northeastern section so that it can augment the expected open pit production in the Tulkubash. Underground drilling will continue from the adit on the Contact Project Area, with the aim of increasing the Resource in the coming year, as well as converting the existing Inferred Resources to the Indicated category.

The Resource database contains 78,529 gold assay records from surface, adit and drill-core samples. WAI has reviewed 4,328 umpire assays, 1,517 results of reference materials and 3,491 blanks sent to three laboratories and concluded that the quality and quantity of data are sufficient to support the Mineral Resource estimates reported herein.

About Chaarat Gold

Chaarat Gold is an exploration and development company operating in the Kyrgyz Republic. The Company's main activity is the development of the Chaarat Gold Project situated within the Middle Tien Shan Mountains, which form part of the Tien Shan gold belt. The Company has delineated a JORC compliant mineral resource of 5.590Moz at a grade of 4.08g/t gold. Chaarat's key objective is to become a low cost gold producer; with initial production from the Tulkubash project, targeting increased combined annual production of over 200,000 ounces as the full project comes on stream.

Further information is available at www.chaarat.com

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

"assay"	qualitative or quantitative analysis of a metal or ore to determine its components
"Au"	chemical symbol for gold
"cut-off"	the lowest grade value that is included in a resource statement.  It must comply with JORC requirement 19: "reasonable prospects for eventual economic extraction" the lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit.  It may be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification
"g/t"	grammes per tonne, equivalent to parts per million
"Inferred Resource"	that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence.  It is inferred from geological evidence and assumed but not verified geological and/or grade continuity.  It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability
"Indicated Resource"	that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence.  It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.  The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed
"JORC"	The Australasian Joint Ore Reserves Committee Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2004 (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
"kriging"	an inverse distance weighting technique where weights are selected via the variogram according to the samples' distance and direction from the point of estimation.  The weights are not only derived from the distance between samples and the block to be estimated, but also the distance between the samples themselves.  The kriging estimates are controlled by the variogram parameters which are interpreted from the data
"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
"Moz"	million troy ounces
"ordinary kriging"	commonly used type of kriging which assumes a constant but unknown grade
"oz"	troy ounce (= 31.103477 grammes)
"t"	tonne (= 1 million grammes)
"variogram"	a method of displaying and modelling the difference in grade between two samples separated by a distance "h", called the "lag" distance.  It provides the mathematical model of variability with distance and is used during kriging
"wireframe"	this is created by using triangulation to produce an isometric projection of, for example, a rock type, mineralisation envelope or an underground stope.  Volumes can be determined directly of each solid

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Source: Chaarat Gold Holdings Ltd via Thomson Reuters ONE

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